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We believe that we will be able to leverage the strength of our brand to market and sell new products. For example, our new E-Bike product will be marketed under the “OREVA E Bike” brand. The use of the “OREVA” name enables us to tap into a consumer base that has had experience with our products and is comfortable with them.
Central Manufacturing Facility with Backward Integration
We own and operate a large integrated manufacturing facility in Samakhayali village in Bhachau taluka in the district of Kutch in Gujarat where we manufacture products for each of our divisions. Our fully integrated manufacturing facilities allow us to benefit from economies of scale. For example, we process and manufacture a variety of plastic components and parts, electronic products and components and metal mould components which we use in each of our divisions. We seek to backward integrate our manufacturing chain whenever possible in order to reduce input costs and increase customer value. For example, we manufacture critical components like plastic parts, eecores transformers, beed rings and printed circuit boards for our CFLs. We plan to build a glass tube manufacturing plant during fiscal year 2009 in order to further integrate our CFL division.
Leveraging our Promoter Group’s Complementary Technologies and Processes
We leverage our Promoter Group’s experience in technologies and processes to manufacture, backward integrate and scale-up our existing and proposed products. For example, in our CFL manufacturing process, we used our Promoter Group’s knowledge of, and experience with, plastics processing, metalworking and electronic component manufacturing and assembling. We intend to use complementary technologies and skill sets in the manufacture of our E-Bikes.
Strong Sourcing Capabilities
We benefit from a procurement network with international and domestic manufacturers and suppliers, which was developed through our management’s and Promoter Group’s efforts over a number of years in related businesses. Further, in many cases, our management and Promoter Group have developed relationships directly with parts and components manufacturers in China, instead of relying upon distributors and middlemen. These relationships have inured to our benefit by having provided us with important access to raw materials, suppliers and component manufacturers and resulting lower costs than would otherwise be available to us.
Nationwide sales and Distribution Network
We have a nationwide sales and distribution network in our own offices, showrooms and depots. For CFLs, at August 31, 2008, we had 126 stockiest, 1,750 distributors, 15,319 retailers, one depot managed by a clearing and forwarding agent in Guwahati and 60 showrooms. For vitrified tiles, at August 31, 2008, we had 38 distributors, 373 dealers. We have our Company depot at Bangalore and four depots that are managed by clearing and forwarding agents. For our ACPs, at August 31, 2008, we had 27 dealers, two depots managed by a clearing and forwarding agent, and two showrooms in each of Ahmedabad and Morbi.
We began marketing our CFLs in villages, small towns and district level cities through a network of distributors. Also, we made our CFLs available in a wide variety of retail outlets, including general stores, grocery stores, novelty stores, medical supply stores, newspaper shops, watch showrooms and seasonal stores. Using this method, we achieved nationwide distribution in a relatively short period of time. We believe that our distribution expertise will assist us in creating and growing a nationwide distribution network for our E-Bikes. At August 31, 2008, we had two showrooms and 36 dealers for our E-Bikes.
Strong In-house Research and Development
Before we determine to introduce a new product, such as our E-Bikes, we undertake research from both the marketing and manufacturing perspectives. We employ an in-house research and development team whose main objective is to work out cost-effective manufacturing processes and maintain quality standards for our products and to develop economical and efficient manufacturing solutions. As of August 31, 2008, we have one new CFL product and one new tile product under development.
Experienced and Proven Management Team
Our Promoter has extensive experience in manufacturing and marketing a wide range of consumer products. Members of our management team also have years of experience in the consumer product business, and have been chosen for their ability to effectively execute plans and policies.
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