February 2017: Preliminary Information Package IDENO INTRODUCTION TO OUR COMPANY: PROPOSAL FOR COLLABORATION WITH FOREIGN MULTINATIONAL

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1 IDENO INTRODUCTION TO OUR COMPANY: PROPOSAL FOR COLLABORATION WITH FOREIGN MULTINATIONAL 1

2 Atlas Ideno Systems LLC Atlas Ideno Systems LLC, is a young company with a long track record. The company, initially established itself as an extension of Safinia Trading in 1979, whose main activities have been and continue to be in the minerals, metals, chemicals, and agricultural commodities trading, consulting, and brokerage. Having realized Iran s FMCG and in general, consumer market potential, Ideno was established to exploit Safinia Trading s core resources and capabilities in international trade and consulting and focusing it only in the food and beverage market as a stand-alone enterprise, upon seeing more favourable business environment following Iran s détente with the international community. Our strength lies in full exploitation of Safinia Trading s fourty year history and capability in the International trade arena to and fom Iran, and tailoring our trading and consulting platforms exclusively to the food and beverage market imports, exports and distribution. With Ideno s goal being stringent data gathering and analysis in our own trading and brokerage activities, we are also able to deliver world class consulting and analysis to multinationals wishing to trade with this origin in the food and beverage market. Our Goal Ideno helps global multinational trading and manufacturing companies venture into Iran for their food, agricultural commodities, minerals and metals trading needs. Our work wouldn t be possible without our aim of adhering strictly to our identified key success factors: Long-term strategic partnerships linking Iranian commodities industries to the world through International trade Being a reliable and professional partner for minerals, agricultural, and food trading activities in Iran through active risk and supply chain management based on Ideno's in-house PPCI Model Strict adherence to product quality and economic, efficient, and effective Ideno trading and brokerage services from negotiations to final settlement Pinning Ideno's strategic growth plans to our clients and partners' success through hassle-free business in commodities and FMCG goods trading in Iran 2

3 Our Principles 1. Economic. Long term profitability is essential to achieving our business goals and our continued growth to the benefit of the shareholders, our employees and society as a whole. 2. Competition. Ideno, against all odds, and against market norms in Iran supports free enterprise. While our competitors seek unethical and immoral business, we will continue to compete and only compete fairly and ethically and within the framework of all laws and regulations of Iran. 3. Business Integrity. Ideno insists on honesty, integrity, and fairness in all aspects of our business vis-à-vis all of our stakeholders from shareholders, to government authorities, our customers, and our competitors. 4. Social responsibility. Ideno companies and brands will act in a socially responsible manner within the laws of our great country and only pursue legitimate commercial objectives and nothing more. 5. Health, safety, security and the environment. Ideno will develop and maintain a stringent, systematic approach to health, safety, security and environmental management in order to achieve continuous performance improvement. 6. Compliance. We comply with all applicable laws and regulations of the countries in which we operate. 7. Local and national communities. We want to profit, but we want our beautiful country to profit as well. Ideno aims to be good neighbors by continually improving the ways in which we contribute directly or indirectly to the wellbeing of our communities and Iran as a whole. We want to contribute directly to our economy s growth and support our employees and service providers to the fullest extent as their success translates to our success. Our Mission Our mission is to deliver the highest of quality of food and beverage goods and services to our customers and clients with high levels of service quality, reliability, efficiency, and professionalism. Strict adherence to health and safety, and a longterm investment in domestic production and distribution, our aim is to contribute to Iran s growth through our production in Iran and supporting local communities and to connect Iranian industries to the world by our trading activities. Through our stakeholder view of the firm, in the long-term we wish to create Iran s first truly global brand, to be able to compete and create value with pride on the world stage, in both traditional and e-commerce markets. 3

4 Our Trading Activities Ideno's marketing activities in food, beverage, & agricultural markets lies at the core of our business. Ideno believes in developing close, strategic relationships both across Iran's food, beverage, and agricultural commodities sector as well as destination markets. Our firm also acts as exclusive representative & distributor of import products in the Iranian market, which includes Ideno consulting on brand management, distribution, and marketing. Involved from the source to the final destination, our aim is low-risk, reliable and nohassle food, agri-commodity, and beverage trading and marketing, offering our strategic partners and clients in Iran grow their presence in markets abroad, and our international clients venture and compete effectively in the difficult but lucrative Iranian food and beverage market. Our team in Tehran is fully dedicated to the reliable international trading of food, beverage, and agricultural commodities to and from Iran. Ideno is a privately owned, full service, sales, marketing, and distribution & trading company servicing Iran's premium & specialty food and beverage import needs as well as servicing European and Asian markets with their fruit, concentrates, dried fruits & nuts, and agricultural commodities needs. Our Consulting Activities Ideno offers multinational trading and manufacturing companies supplier relationship management (SRM), supply chain risk management consultancy solutions (SCRM), business development across Iran's commodities markets, and FDI consulting solutions. Ideno's contribution is aligned throughout the agricultural, food, & mining and other commodities value chain as an evolutionary process, from current state diagnostics, to operating plan design, project management and implementation, and finally control. Ideno, with our acquired capabilities from our mining and agricultural background has the experience and track record for working with key global industry players, advising clients for professional and world-class trading and investment with this origin. Consulting Platforms Risk Management Supply Chain Management FDI Consulting, Implementation & Management Commodities Markets Intelligence Reporting Business Development Solutions Marketing & Brand-building HORECA Sales Consulting Export Assistance Consulting 4

5 Decision Analysis & Operations Research Ideno's Brokerage and Consulting Frameworks can help your business: Business continuity planning and enhanced trade process standardization with our transaction cost minimizing services Building trusted networks and reducing monitoring costs for our clients across product value chain Better supply planning for effective infrastructure and general trade planning through better visibility Design, implementation, and control of strategies and operating models that can evolve in response to changing market conditions Optimal use of data and information through the audit trail provided by the PPCI operating model for centralized risk management and more informed decision-making for our clients 5

6 Since establishment in 1979, the core of our activities has been the provision of full brokerage and intermediation services to our clients. We continue to work with our clients and partners to address demand and supply gaps present in international markets, offering Iran as a source for their commodity needs with our professional, and reliable services. Our brokerage services can facilitate access to foreign markets for producers in Iran, as well as entry into the Iranian industry as a source of supply and/or for investment for our overseas clients. We develop only long-term strategic relationships. Some of our past clients and a short-list of transactions affected spanning over our 40 year presence are listed below. While the industry landscape, based on rapid exit and entry of firms has been in a state of flux, Safinia Trading has offered continuous service throughout the years to key global players. Safinia Trading has a track record in acting as representative of international commodity trading and mining companies, petrochemicals, & food/beverages providing us with vast experience and knowledge to help our international clients venture into Iran for their trading activities. 6

7 Our Services at a Glance Markets Served Global Reach We currently have partnership agreements in Europe, Asia and North America, for consultancy, brokerage and trading in key strategic countries vis-à-vis Iran. The same consulting platform is used across our partnership offices. Our global reach allows better service offering to our clients both in Iran and countries where our activities span. We are close to every customer we work with, for tailored solutions and offering of efficient, economic and effective value adding projects. 7

8 IDENO CONSULTING Service Lines Please note each of the following can be chosen as a track for our suggested entry and competition into the Iranian market. While the Iranian FMCG market is a lucrative one, it is marred with difficulty for entry and competition. These are because of health ministry requirements, tariffs and unfair trading practices and red tape, contract non-enforcement by distributors, smuggling (large share of the market). For this reason we have been consulting several brands in Italy, South Africa, GB, and France on entry and competition through objective analysis and consulting for the lowest risk entry and competition strategy and being with them every step of the way either as exclusive distributors and/or representative/agent. 1 Service Line 1: Ad-Hoc Consulting & Brokerage: Export Assistance Preliminary Consulting (DA/OR): We sit together with client, and use decision analysis/operations research framework to find fundamental objectives and conduct data driven analysis on goals for entering the Iranian market. This stage would include finding out what it is the exporter would like to achieve and in the end develop criteria for finding the best entry and competition strategy for Iran (robust scenario analysis) in achieving its goals. The data also provide the criteria for finding the best candidates for distributorship/representation in the market. Candidate Search and Choice: From above, we develop a short list of candidates for distributorship. We conduct due diligence on candidates and sit together with client for making optimal decision on choice of distributor/distributors Market Research and Analysis: We conduct market research and market analysis beforehand, for exporter to assess relative of likelihood of success in the market. This includes, entry points, price point analysis, competition, distribution networks, country risks etc. This can make sure the exporter has a detailed Idea of the market before entry and negotiations with potential partners in Iran. This ensures the best deal is negotiated with local buyers/distributors and best terms are negotiated. Strategic Planning: We conduct strategic analysis for the Exporter in view of the Iranian market. This ensures that objective analysis promotes sound decision making for entry and competition in the market. This step would include full strategic considerations for distributor search, distributor choice, and how to compete in the market promoting a strategy for the long term that has high likelihood of success. Health Ministry Prep.: We provide all required documentation and steps for gaining of health ministry permit. This includes direct consultation with the health ministry before negotiation with potential candidates. There are many cases where the health hurdle has been used to disadvantage the exporter and hence knowledge of the steps and documentation before entry is vital for success and having a credible timeline for entry into the Iranian market for FMCG. 8

9 Negotiation and Settlement: We negotiate with chosen candidate partner on contract terms together with exporter to ensure the best contract terms are included in light of information assessed and specific to candidate chosen (i.e. consideration of strategic attributes). Additional Services: (As Required): Contract Enforcement: We ensure the health permit and other activities are going as planned and meet the negotiated timeframe/timeline. This is critical for time to market. Marketing & Brand-Building Consulting: We are distributors in the Iranian market and hence have access to information on consumers and distribution networks. With this, we can ensure brand equity of companies is understood by local partners in Iran and consult on the best marketing and brand building to ensure product sustainability. Agency: Should the exporter require, we can monitor and control the trading and distribution to ensure the partner is sticking to the agreement and ensure efficient communication and trading. This would be acting as agent representing the exporter s interests from negotiations, to transport, documentation up to final settlement against a negotiation commission from order value of each transaction. Benefits We use cutting edge consultancy framework with total transparency to coach exporters on the Iranian market, Iranian trading norms, consumption patterns and most importantly make the most informed entry and competition strategy decision. This ensures likelihood of success in a very difficult market. Exclusive distribution agreements tie two partners together for a long time and hence our service ensures the exporter makes informed decision on the search and choice of potential partner candidates in the market. Our consulting services ensure decisions are made with full information and consider all key business criteria for success including: marketing, brand building, partnership, sales, sustainability, legal compliance etc. The Iranian FMCG market is a complex market, this service offering minimizes entry and competition risk for the exporter by giving it the guidance and tools needed to be a strong market player Exporters can ensure they can comply and have an actual market for their goods in Iran before entering into negotiations or trying to comply with health requirement (i.e. investment of time and money) Methodology and concepts used as consulting framework can be modelled as an overall internationalization strategy. Hence investment in this consulting solution can be replicated across the exporter s commercial department for success in all regions and blocs 9

10 2 Service Line 2: Local Operations: Nestle Model In this service model, Atlas Ideno Systems LLC becomes an extension of the exporter in Iran, with the added advantage that it can become a HUB also for exports into the GCC for companies. This service model would effectively give total power to market and distribute to the exporter. Our offices can be used to register the company in the territory of Iran and effectively gain import permit and all documentation in the exporter s name. Our office would guide the exporter through the entire process and provide our team and office for this structure, in the following method: Import Compliance: The exporter would be given total information on Iranian laws and regulations for gaining of health ministry permit, importing, marketing and distributing in Iran as well as repatriation of funds from proceeds of sales. In effect, the exporter has total control over its imports, marketing and sales strategy and does not have to bear the margins of an Iranian importer. The following are the steps and benefits of the Local Operations mode: Exporter cuts the margin of a distributor in the market, acting through an agent (Atlas Ideno Systems) and using these as an extended office in the Territory of Iran for sales in the 80,000,000 Iranian market and the 130,000,000 regional bloc. Exporter has total control over brand and sales strategy Obtaining health approval and other preliminary costs are very low in Iran Cutting the margin of distributor for entry into Iran can be very lucrative and having a regional hub beneficial for the GCC access Most FMCG majors, follow such a model for the lucrative Iranian market with success 10

11 3 Strategic Alliance Model For most products there are many local companies producing high quality products against international norms at low prices in the Iranian market. While we agree that premium users and the premium market are a good entry point for foreign producers, the strategic alliance model can be a successful entry model. This service model would include: Product and Exporter assessment (similar to step 1 of Ad Hoc service model) and assessing goals and objectives of the exporter and understanding its key success factors in competition in home country and elsewhere. Product assessment: Quality and price Finding similar producers in the Iranian market and using DA/OR methodology for finding the best fit as a strategic partner Help exporter make a short list of candidates and pick the partner with best fit Deciding to produce locally (i.e. package locally) and or sell through private label Use brand names through the strategic alliance to promote the product in Iran as well as find suitable and cost effective production for access into the Iranian market as well as exports into the GCC The method of strategic alliance would have to considered after step 1, namely understanding the goals and objectives of the exporter. Benefits Can market and make sales through the strategic alliance with a local Iranian partner who produces same/similar product and use existing distribution channel Develop efficient system of production through the alliance and tap into the region (GCC and beyond) Either package in Iran (i.e. sending finished product to Iran in Bulk), or produce private label for the partner and export into Iran Gain total control over marketing, sales, production etc. for Iran and surrounding markets Can ensure access to the Iranian mass market as opposed to the small premium market of Iran Would have a much easier time getting relative permits and meeting local compliance Exports of products produced through the alliance would have tax advantages and potentially receive funding locally Can promote a single product line through the alliance, tap into the market and with local presence gained make sales of other product lines cutting distributors margin 11

12 The Ideno Benefit We understand that entering Iran has many benefits (i.e. large market size, sophisticated consumers, good infrastructure etc.) however being exporters and distributors ourselves we understand of the difficulties. Through our own operations, our 40 year history in consulting and brokerage/agency and our own distribution we have access to all required information to aid foreign companies wishing to enter the market on their own terms. *We note we provide and sign international contracts in line with international laws and regulations for each service line which can make each exporter at ease about our professional business acumen. We will do our utmost to become their in house consultant for their success in the market. Our goal for our clients wishing to collaborate on the 3 service lines are: Providing total information about legal compliance, country risks, partner risks and in general all risks for entry and competition in the Iranian market Making sure the strategy is chosen which has the highest likelihood of success for the company based on each company s unique needs Make sure foreign exporters can comply with all laws and regulations of the country prior making any investment of time and money for accessing the market Guiding on competition and strategy of the market and making sure the right partner is chosen which can ensure the foreign exporter s success Developing tailored export/internationalization model which will ensure they succeed in Iran, and at the same time help each company replicate these strategies across their commercial department for all export destinations tailoring to each market. i.e. while they use this service for Iran, its cost can be broken down between all exporting destinations We take care of brand equity, marketing and brand sustainability in the market to ensure low risk options for entry and competition All of our consulting service draws on: Our 40 year continuous presence in the market Our experience in the FMCG market Decision analytic, financial modelling, Operations Research, SCM, CRM marketing and strategic management frameworks Consultants and ability to tap into professionals in the health ministry, Iranian standards office, customs etc. Understanding of Iranian mentality for consumption and business We look forward to collaborating and partnering up with foreign companies on these service models for the benefit of their clients and hope for long term cooperation. 12

13 IDENO helps global multinational trading venture into Iran for their minerals and metals, food & beverage, and petrochemicals trading needs, and create value along the way. We are committed to delivering on our brokerage and consulting services on all material import needs of Iran, and exports of local commodities. Contact us for further information. Safinia Trading (Brand of Atlas Ideno Systems LLC), established in 1979, has a 38 year track record working with key global industry players, advising clients for professional and world-class trading with this origin. For Further Information Contact us at hi@idenosystem.com Mottahari Ave., Ouraman St., No. 2 Garrous Alley Teheran, Iran This document has been prepared for general guidance, and is not offered as professional advice. You should not act upon the information contained herein without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this document, and, to the extent permitted by law, IDENO does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. IDENO