Published on March 10, 2014
TARGETTRADING TARGETTRADING “The world´s door will be open for you” March, 2014
TARGETTRADING OPERATIONAL STRUCTURE OF THE GROUP Trading Company, stands out as a logistic operator for import and export procedures since 1997. One of the three first Bonded Warehouses in the country, provides complete and customized logistic services National Distributor of Steel and Resins 2 600.000 m2 of bonded space, plus 40.000 m2 of covered area Located less than 30 km from the port and airport of Vitoria. Connected to highways and railroads Zero theft rate since being established (1993) Information system that allows logistic planning and management in the Bonded Warehouse. National Distributor. Works with flat steel and thermo-plastics resins. Alternative Supplier of imported products with fixed prices in Brazilian currency (Reais). Seeks and trades special products. With offices in SP, SC . RJ and ES. Global Logistic Managing. Works with various market segments, focusing on the understanding our Clients` needs offering complete solutions. Logistics, operational, fiscal and financial planning. Managing Reports through our state- of-art technology system. Easy Internet and iPad access. 16 years in the market. Operations of “On Behalf Of”, “By Order” and Management. A pioneering vision it´s TEAD Brazil's main differential. The group now detains the concession for part of the cargo area of the Riberao Preto Airport Vast experience in Bonded Warehouses. First to obtain a Concession for Air Cargo an airport in Brazil, implemented within the primary area of the “Leite Lopes” Airport (Riberão Prêto- SP). Able to offer better quality and quickness.
TARGETTRADING Inauguration of Targets branch in Rio de Janeiro (RJ) A HISTORY OF ACHIEVEMENTS 3 20 years of experience and leadership in Brazil's logistic sector 1993 After the bonded warehouse concession, Silotec was born, pioneer in Brazil as being a bonded area outside the (air)ports (EADI). 1997 Silotec , being hired by trading companies, obtained a logistic knowhow resulting in Target being founded by one of Silotec's shareholders. 2002 2007 Target Trade Ltda. becomes Target Trading S.A. 3rd biggest company of its sector in Brazil 15th biggest company of its sector in Brasil 2009 Regulation SP and ES for imports. 2004 9th biggest growing company in the import – export sector in Brazil1 Notes: 1 As per Gazeta Mercantil Journal `s article . 2 A Tax Benefit offered by the Santa Catarina State. 2006 Government instauration of the Order Operation. NEO was founded 2010 Registration in “Benefício Pró- Emprego” 2 (SC) 3 2012 Received authorization for the construction of the bonded airport terminal in RIberao Preto 2013 Opening of TEADs cargo area of the Riberao Preto Airport
TARGETTRADING SECTION 1. . GENERAL OVERVIEW OF TARGET
TARGETTRADING 5 Founded in 1997, operating in the foreign trade sector ever since. Offices and operations in the São Paulo, Espirito Santo, Santa Catarina and Rio de Janeiro state. Operates utilizing state taxes incentives called FUNDAP (ES), INVEST (ES) and “Pró-Job” (SC) . Target can singlehandedly deals with the entire import-export logistics procedures of its customers; door-to-door, regardless of the operation complexity. Target is responsible for the whole process; from the first operational contacts to the delivery of the cargo at the customer's door in Brazil or abroad. Target's services is customized for best results and covers the exchange of raw materials, products for retail as well as special procedures such as the importation of the whole industrial plant. Target has its own staff for custom clearance, dispatch and expedition. In order optimize it’s resources and operations, Target implemented the Six Sigma process improvements. TARGET TRADING Global Service Stands out in the commodity market Important Customers – Big Operations Credibility in the market as well as in governmental entities Owner of the bonded warehouse area Silotec. Customized Financial and Operational Planning GENERAL OVERVIEW
TARGETTRADING SECTION 2. GENERAL OVERVIEW OF SILOTEC
TARGETTRADING 7 1 mil km INFLUENCE AREA EADI SILOTEC - ES Bonded Warehouse strategically located near the Port of Vitoria STRATEGIC LOCATION Pioneer in Bonded Warehouse facility in the country . Bonded and national warehouse area of 600.000 m2. Located less than 30 Km from Vitoria airport and port, connected to highways and railroad. Zero theft rate since its foundation (1993).
TARGETTRADING 8 Information system that allows the logistic planning and management of EADI Operational Management System Datasul EMS and HR. ERP information System – integrates in real time all data and processes from all areas of the company. It covers from the arrival of the container to the mediation of services. Imports services taken for the emission of invoices. Easy access to our system as information is updated in real time . Transport Management Management and programming of arrival and storage of containers and cargo. Service Control Registry of services, programming them and later informing their conclusion. Based on this data, consultations and reports, the SAC can consult and inform the Client if a determined service has been concluded or not in real time. Equipment Management Control Information on the piler's hour meter, mileage of vehicles, tank filling , etc, in order to determine the costs of the equipments use and maintenance . INTEGRATED INFORMATION SYSTEM ERP
TARGETTRADING SECTION 3. GENERAL OVERVIEW OF NEO AND TEAD BRASIL
TARGETTRADING NEO NEO was created to meet a demand in the retail market, focusing in Clients that choose to buy conservative amounts in the local market, whith fixed prices in "Real" so that they aren’t exposed to exchange rate risks and import buracracyand delays. Neo’s headquaters is in the Espírito Santo state, with branches in São Paulo and Santa Catarina. Highly qualified and experienced team, looking for acessing imported products and the best options and solutions in distinct markets, in order to always assure: response, quality, competitiveness and low prices The main segments that NEO operates are: ferrous and non-ferrous metals, construction, resin and chemical products. The first customs terminal operated by a private company in a primary zone of an Airport in Sao Paulo. It holds the concession since 2012, having a large logistics network of National Distribution and investments of $ 30MM. Located approximately 300 km from the city of Sao Paulo-SP, in the richest country side of the state, it has a high capacity of receiving cargo flights and posses special rooms for cargo agents and airlines. Private structure with modern equipment and high level of security due to it´s constant monitoring of the load. In addition, TEAD is able to provide cameras and refrigerated vaults, as a differential treatment for special and dangerous cargo. TEAD BRASIL 10
TARGETTRADING SECTION 4. OPERATIONS OFFERED
TARGETTRADING CHARACTERISTICS OF IMPORT “BY ORDER” It is necessary to draw a contract linking the company`s RADAR in the Brazilian Income Revenue Service (RFB) in order to formalizing importing procedures. Client, as well as Target, needs to be properly registered in the RADAR to authorizes companies to carry out import and export procedures. The Non-Limited RADAR must applies for companies that regularly go on foreign transactions and have good financial capacity. The import operation will have Target as the importer and the Client will only be mentioned in the Invoice as Ordering Party. Target will be responsible for financing the operation using its own resources. Client won’t be able to advance resources to Target meet the payments of expenses and taxes in the clearance process of the goods. Financial costs will apply only to the expenses that must be paid in advance by Target. Transfer of ownership of the merchandise occurs through Invoices. 12
TARGETTRADING CHARACTERISTICS OF IMPORT “ON BEHALF OF” It is necessary to draw a contract linking the companies RADAR in the Brazilian Income and Revenue Service (RFB) in order to formalize the import procedure; Client and Target must be involved in the whole import operation; Client, as well as Target, needs to be properly registered in the RADAR to authorizes companies to carry out import and export procedures. The Non-Limited RADAR must applies for companies that regularly go on foreign transactions and have good financial capacity. Client is responsible for payment of the goods to the importer. Client can provide financial resources in advance for payment of costs on clearance. Before the transfer, the goods area accounted in the importer balance as a “third-party inventory”. Delivery of goods takes place through the “Shipping Note” and not as “Sales” (invoice). 13
TARGETTRADING CHARACTERISTICS OF “BONDED WAREHOUSE” OPERATION The bonded warehouse facility in the importing process allows the storage of goods in the Brazilian territory without payment of the customs duties. Upon request importer issue a invoice to consignee to clear a specific lot of goods. The importing goods intended to be stored under this regime must be consigned to Target, with no exchange coverage and those conditions must be stated on the Proforma Invoice. Goods, under this regime, may remain stored for a period of one year, extendable to one more year. In exceptional cases however, an extension for one more year could be granted, taking under account the three year limit. Before that the client must re-export the goods. In order to register the DI (Import Declaration) it’s necessary to issue a comercial invoice for the lot that will be custom cleared. This Comercial Invoice must have exchange cover and payment terms. Target will appear as the importer now. In case the Client wishes not to clear stored goods, there is the possibility of re-exporting them back to their country of origin. The operational procedure of re-exporting goods resembles an exportation process. The documents required: Proforma Invoice from Target (shipment’s consignee), to be sent to the exporter, and the shipping documents (BL) that will be sent along with goods. Bonded Warehouse operations allow manufacturing operations related to packing and re-packing the goods. This includes assemblage, re-packing, maintenance and repairs.
TARGETTRADING Benchmarking and Measurement of the International Supplier’s Performance. Measurement of the delivery deadline of the Supplier Abroad. Payment terms and deadlines. Package quality. Correct issuing of documents, Invoice, packing-list, certificates and so on. Quality of the provided product, based on reports of non-compliance issued by the Client. Control of the performance of the service providers involved in the operation. Constant monitoring of arrival, removal and clearance of the process alongside with the Dispatchers, Freight Agents, Transporters and Brazilian Income and Revenue Services (RFB). Demand of shipment instructions done alongside the Freight Agent. Verification of Treatments,TC4, TC6 in the air shipments. Check information on BL and AWB, in accordance with the Brazilian Income and Revenue Service (RFB) `s new cargo system – Siscarga / Mantra. Emission of Import License and monitoring Brazilian regulatory agencies in obtaining product registration and approval to enter Brazilian territory . Linking Dispatcher, checking and remittance of original documents while demanding agility in the registration of the electronic process (SISCOMEX). Requisition and monitoring of the transport of cargo cleared by the RFB. Logistic Optimization Study of the viability of the consolidation of the cargo abroad, allowing the reduction of freight costs and fixed expenditures per shipment. Check removal options, in order to reduce storage costs in airports and agility of clearance in primary areas of ports and airports. CHARACTERISTICS OF THE OUTSOURCED OPERATION VIA TARGET
TARGETTRADING Emission of reports and controls Information and data updated via EDI in real time allowing different options of reports and surveys as needed. Access to our system for information in the goods clearance processes. Management of the buying process Constant monitoring of the suppliers abroad Verification of the conditions in the order confirmation and delivery date. Monitoring the dates and remittance of foreign exchange transactions. Control of payments sent by the dispatchers and other expenses involved in the import process. Pré-Calculation of taxes, sent by the dispatcher Verification of commodities duty description and coding system (TARIFF NOMENCLATURE - NCM´s and TEC WIN). Link the exchange transactions contracts in the DIs , avoiding problems with Brazilian Central Bank. Constant search for improvements in the import process Fulltime dedication in the search for efficiency and excellence in all steps of the process, aiming to: • Reduce costs • Negotiate longer payment deadlines • Optimize Cash Flow • Reduction of paper work 16 CHARACTERISTICS OF THE OUTSOURCED OPERATION VIA TARGET
TARGETTRADING SECTION 5. IMPORT BENEFITS
TARGETTRADING FUNDAP (ES) The FUNDAP ES (Espirito Santo) is a program of Espirito Santo´s government created by Law 2,508, of May 22, 1970, and regulated by Decree 163 N, of July 15, 1971, with the purpose of adding revenue to the State’s tertiary sector by increasing and diversifying the trade interchange with foreign countries, as well as adding revenue to the States primary and secondary sectors; Tax Benefits: deferral of the ICMS - during customs clearance in the moment a subsequent removal of the goods occurs and a reduction in the calculation basis of the ICMS so the effective aliquot is 4% in the transactions between taxpayers in the state of Espirito Santo. The ICMS payment will be made at the 26th day of the month right after the operations by FUNDAP sponsored companies occur . Warning: In interstate operations, the use of FUNDAP will not apply when the import occurs on “On Behalf Of” modality (see: Protocol signed between SP x ES No. 23 of 2009 and ICMS 36/2010 Agreement). 18
TARGETTRADING INVEST-ES is a program developed in order to increase investments in the state of Espirito Santo that aims to contribute to the expansion, modernization and diversification of the productive sectors of the state. Its benefits are deferred payment of ICMS (Excise Tax) on imported goods in the moment the goods leaves the beneficiary´s establishment , reduction in the ICMS Calculation`s Basis when the goods leaves the beneficiary´s establishment , designed exclusively for the Distribution Centers - CD's , resulting in a taxation of 4% as well as a presumed credit, which is the largest discount on the basis of the ICMS calculation compared to other state benefits. To take advantage [indirectly] of the benefit, the client must use a branch that is properly installed in one of our general warehouses [SILOTEC]. There is a need to link the companies, which will be conducted in accordance with the information from State Registration Number of the [IE] branch, or head office, properly installed inside Silotecs warehouse; which after analysis, the SEDES/SEFAZ will publish the link in approximately 07 [seven] working days. INVEST (ES) 19
TARGETTRADING SECTION 6. . DIFFERENTIALS
TARGETTRADING Availability of all reports of the Group Companies in the same software, providing lower costs and allowing Client’s on line control the whole importation process. Via iPad: Target provides, in the form of lending, an iPad to its Clients. Quick and easy access to reports and graphs, allowing a fast and simple visualization the stages of the importation process as well as the performance of each stage, in real time. Also, for better control, alerts can be programmed to go off if a process at any point does not meet the pre-established lead time. Via IPhone: Vast access to information on any matter of the importation process, along side extreme agility. Fast visualization of reports and graphs, allowing Client easily interact and obtain on line information about its import processes. Via Web Access to more than thirty reports, with financial, logistics and accounting information available. Research of Invoices generated by the Invoice number, Process reference, ID, Emission date (period) and others; Visualization of Billing Notes to be Paid and Detailed information on products generated by Invoice; Stock Consultation Research of Importation Process, generated by the process’ code, PO, Client Reference and others; Also available, reports on: Lead Time of Customs Release, Shipment, Financial, Process Closing, by Product among others MANAGEMENT TOOLS Complete awareness at any time, any place. 21
TARGETTRADING MANAGEMENT TOOLS: IPAD Through Target’s app, the Client can promptly overview it’s entire importation process and measure the performance levels in each and every step. Alerts can also be configured, to making the management even simpler. For an easier visualization, the color of the writing matches the SISCOMEX parametric random selection channel, in the example all the processes went to the yellow channel. The Lead Time Reports are the easiest way to verify Target’s performance. Through the partial and total lead times, it’s possible to follow if the SLA is being reached . In addition, if a process surpasses the ideal lead time, it will be highlighted (with a red arrow). To understand the reason for the increased Lead Time, you get more details on this process with a simple click. The Process Report contains valuable information such as the Customs Officer who released the process, making it possible to create performance level from them as well. Consequently, we will be able to estimate the average time a process in the red channel with a certain customs` official will take to be released, for example.
TARGETTRADING MANAGEMENT TOOLS: IPAD The information available on the iPad is automatically updated as more information is imputed on Target’s system. This allows the Client to follow the progress of any process before it’s conclusion Shows the progress reach so far
TARGETTRADING MANAGEMENT TOOLS: IPAD Through the Invoice Reports, you can visualize important information that is linked to the DI (declaration of Importation), for example the product description and, NCM Code, DI and Addition number. It also contains the usual product information such as quantity and unitary price. Information pertaining to the taxes, net cost of the product are also accessible trough the Invoice Report. A unique factor is the visualization of the benefit value per product on the invoice, allowing picture of the financial effect the benefit has. In addition to the Reports that indicate performances, Target’s app also allows you to view and consult data on the invoices issued to the Client
TARGETTRADING MANAGEMENT TOOLS: IPAD The data shown in the Reports can also be visualized through graphics. For a better read the graphic statistic’s are highlighted.
TARGETTRADING MANAGEMENT TOOLS: IPHONE With the intent of easy even more our clients` access to information, Target app is also available for iPhone. With the iPad, the information available in the app is automatically fed by Target´s system, guaranteeing Client will always be updated in real time. With the screen adapted to the iPhone, it´s possible to visualize all the reports and graphs completely allowing for the same experience as provided by the iPad. Shows the progress until that moment Statistics of the process Process data
TARGETTRADING HIGHLY QUALIFIED TEAM Target assembles a specialized team for each Client, composed by members from each department. This team will thoroughly understand the Client’s process and contribute to an efficient operation every step of the way. Commercial Responsible for determining with the client the commercial conditions, contracts, establishing deadlines and S.L.A. Provides quick answers about the legal instruments celebrated between the parties. Analyzes the taxes applied for each operation, checking, among others, the existence of Tax substitution or any Tax reduction on calculation `s basis applicable to the product, advising the Client on possible future contingencies. Represents the client within Target, making sure deadlines are achieved, updating the Client and assisting other areas so that the Client is completely satisfied and secured in the importations done with us. Responsible for the Client’s current operations, keeping the Client informed at all times and maintaining constant contact with the suppliers in order to achieve the shortest lead time and best service at the same time. Previous analysis of the documentation, review of the tariff nomenclature of the product (final decision is the client), confection of Import Licenses (LI) and Importation Declarations(DI). The customs team files for the inspection with the public organs in order to remedy any doubts and procedures within the process in the outmost correct and clear form, always in keen with the legal scope. Responsible for suggesting financial structures that better suit the Client’s operation. Analyzes and guides the Client in the issuing of Invoices with the appropriate CFOP, as well as the mode of operation and the accounting method in operations, such as “On Behalf Of” or “By Order”. Target Legal / Tax Customer Management Operational Customs Financial 2 Accounting 21 2 3 4 5 27
TARGETTRADING Due to the unique structure of the Group, Target is able to provide complete in-house services, from the Trading Company to the Bonded and General warehouse facility (SILOTEC). This guarantees a smooth operation with efficient communication and management through out the importation stages. There is also the opportunity of opening a Distribution Center (CD) with Taylor-made infrastructure to the client inside the facilities of the Group’s Warehouse SILOTEC. By opening the Client’s branch within our logistic structure, SILOTEC, while also being located in the same physical space as the Bonded Warehouse and Distribution Center, there are no costs to remove the cargo and, at the same time, provides higher agility in the transfer of it from one location to another, which can be done in the same day if necessary. Low operational costs and easy inventory management of the opened branch. Own Custom Clearance Staff, generating agility and confidentiality. Availability of support and assistance of Target and Silotec´s employees. Target has an Insurance Policy with Ace Insurance Company for covering the national and international legs of the operation, this is optional for the client. He can contracted and join our insurance policy or not. Reduction of cost through the use of import benefits, FUNDAP or INVEST, and consequently Cash Flow gain for the Client. OPERATING THROUGH VITÓRIA
TARGETTRADING MAIN LONG TERM CLIENTS Quality service resulting in loyal and selected clients ANDRÉ BRETT
ARDS & TBI - Trading Off Ventilation Targets . Salvatore M. Maggiore, MD, PhD . Rome, Italy . firstname.lastname@example.org
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