1. E-DISTRIBUTION INITIATIVE Ya-Ping Zhou Greater China Director, NPES Tucson, AZ April 12, 2003

2. Chinese Printing Market GDP 2001-20027.3% Printing establishments100,000 Employees2 million Annual book titles published150,000 Magazines9,000 Newspapers2,100 Paper consumption 3 million tons

3. Import market (2001 equipment) Computer-to-plate 78 Web offset press 72 Sheet-fed offset press 81 Small sheet-fed offset press 7 Other offset press 397 Web letter press 34 Other letter press 143 Flexo press 25 Gravure press 162 Web screen printing machine 23 Flat screen printing machine 200 Other screen printing machine 104 Other printing equipment5,594 Total units6,920

4. Import market (2001 supply) Printing & writing paper1,390,000 tons Ink24,700 tons PS plates2,875,000 sq.m. Film3,810,000 sq.m.

5. Top ten imports  Multicolor sheet-fed offset printing press  Computer-to-plate system  Perfect binding machine  Digital printing press  Commercial web offset printing press  Newspaper printing press  Hard-cover book production line  Flexo printing press  Converting machine  Digital proofing

6. * Years to 50 Million Users 13 16 38 4* Source: Cisco Systems * Years to 50 Million Users Internet impact

7. Internet and printing  130 million computer users  300 million at end of 2010  <5% printers and establishments use Internet for business  80% printers and 95% distributors use Internet for information  1-2% printers use online production

8. E-Distribution Initiative  Objectives  Design and build a dual-language B-2-B, E-Distribution network platform  Establish an e-channel of communication between NPES members and Chinese distributors  Enable small and medium companies to expand market share with minimum cost  Platform elements  5 Modules  Platform engineering architecture  Based on Windows Info Server & Oracle Database Server  Broadband support for voice and video interactive  Two-site servers for redundancy  Hardware firewall, software encryption for security

9. FUNCTION MODULES 1. E - Information 2. E - Business 3. E - Trade 4. E - Training 5. E - Assistance

10. E-Business E-TradeE-Training People Equipment Processes Resources E-Assistance E-InformationModules Trainees B2B Customers Dealers Suppliers

11. E-Business E-TradeE-Training People Equipment Processes Resources E-Assistance E-Information Login Modules Trainees B2B Customers Dealers Suppliers

12. E-Information E-Business E-TradeE-TrainingModules E-Assistance Trainees B2B Customers Dealers Suppliers

13. E-Information E-Business E-Trade Home page User Login advertisement

14. E - Information Module  Chinese/English directories  Virtual showrooms  NPES news  Suppliers news room  Announcements  World market news

15. Directories NPES MEMBER DIRECTORY CHINESE DISTRIBUTORS DIRECTORY CHINESE CUSTOMER DIRECTORY

16. News & announcements

17. Virtual product showroom

18. E - Business Module  Online conferencing  Distributor and customer data management  Sales and marketing management  Product and service promotion  Online receipt and delivery of sales and marketing materials  Estimating, purchase order and invoice management

19. E - Business

20. E - Trade Module  Chinese/English Directory of importers/exporters  Online bidding  Online purchasing  Online auction  Procedures and Regulations

21. E - Trade

22. E - Training Module  After-sale technical training offered for customers by suppliers  Web offset, flexo, CTP and others, customized by suppliers  Online training/learning  Graphic arts institution educational courses and certificate programs  NPES China Training Center training programs  Color management and quality control and technical standards

23. E - Training After sales Customized Online training Certificates NPES Center Standards

24. Demand for e-training u Availability of PCs and Internet access u Rapidly changing technologies, processes, procedures, and resulting volume of information to be absorbed u Increased need for educating customer and customer’s customers in order to achieve successful sales u Increased demands for cutting costs u Not enough qualified employees u Too slow to gather and process market information u Globalization of corporations and digital workflow require more effective ways of distributing knowledge

25. E - training possible  Access to anyone, anywhere  On-line access via 56K modem or better  Broadband is better, but not required  CD-ROM courseware requires minimal platform (Pentium 3, 200 MHz, 64 MB RAM, 500 MB disk)

26. Member benefits E-training Trainees (Potential buyers) Qualifying Trainee profile Support through membership Follow up & close sales NPES members

27. InfoFind Architecture Training Environment Registration, Security, Payment, etc. Term Search Quick Reference Descriptions Text Definitions Detailed Descriptions Illustrations and Animations … Course A Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course B Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course C Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course D Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course Y Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course Z Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Reference Course Access Direct Access Search Members

28. Search engine Registration, Security, Payment, etc. InfoFind Term Search Quick Reference Descriptions Text Definitions Detailed Descriptions Illustrations and Animations … Course A Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course B Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course C Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course D Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course Y Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Course Z Topic 1 Topic 2 Topic 3 Topic 4 Topic 5 Reference What do you want to learn? InfoFind Professional Search Engine Quick Reference Topics Term 14, Term 2689 Term 8344, Term 8345 Full Text A2 C5 Y3 Context Members

29. E - Assistance Module  Export/import  Shipping and warehousing  Trade show calendar and participation  Market study and research  Literature design and production  Advertising placement

30. Management structure NPES CA Office China Rep. OfficeChina Training Center Server Eng. Office

31. Rep. Office - NPES Center  Common objective  Different structure  Resource sharing  Support

32. Facility  Head office Room B, 22F Jian Hui Bldg. 922 Hengshan Rd., Shanghai 200030  Project management  Data processing and contents editing  Marketing and sales  Technical office 4F, 477 Aomen Rd., Shanghai 200060  System design  system management and maintenance  Server site NA (located within an existing local IT company)  Hardware server  24-hour site maintenance

33. Finance (Nov. 02 - Oct. 05)  US Department Commerce$180,000  NPES matching fund$380,000 Total$560,000 - Head office legal establishment - Onsite staff - Hardware and software - Marketing and promotion - General operations and taxes  NPES Shanghai Center$203,000 - Support personnel - Office equipment - Business expenses  NPES Rep. Office business revenue - Membership feesNA - Service feesNA

34. Timetable  November 2002 - April 2003 Preparation and legal establishment  April 10, 2003 System structure design begins  May 15, 2003* Proposed opening ceremony date  July 1, 2003 Marketing promotion begins in China and US  August 15, 2003 Basic function modules ready for use  December 31, 2003 Full function modules ready for use

35. To participate  Membership  Member access procedure  Member benefits  Member rights and responsibilities

36. Contact  US project office PO Box 81928, San Diego, CA 92138-1928 Tel:619-238-4222Fax: 619-237-0757 Email: npeszhou@aol.com  China Rep. Office Room B203, 22F Jian Hui Bldg. 922 Hengshan Rd., Shanghai 200030 Tel:86-21-6447-0118, 6407-3300 x 127, x128, x129 Fax:86-21-6447-0117 URL:http://www.npes.ebis.com.cn  Technical office (NPES Shanghai Training Center) 4F, 477 Aomen Rd., Shanghai 200060 Tel:86-21-6298-3829, 6277-0580, 6299-4124 Fax:86-21-6276-5283 URL:http://www.meihu.com.cn

37. Thank you!