1. Managing a global supply chain with the use of local sourcing Søren F. Knudsen Sales and Marketing Director

2. EWEC, Athens, 1 March 2006. Side 2 It has been said that arguing against globalization is like arguing against the laws of gravity. Kofi Annan

3. Globalisation in the wind turbine industry

4. EWEC, Athens, 1 March 2006. Side 4 What is globalisation?

5. EWEC, Athens, 1 March 2006. Side 5 Globalising the industry Geographic market diversification Global wind turbine manufacturers Exchange rate differences Rising shipment costs Requirements for local production Optimising the supply chain Stronger demand for global production capacity among sub-contractors

6. EWEC, Athens, 1 March 2006. Side 6 Market growth outside Europe 4,496 MW Approx. 11,000 MW

7. EWEC, Athens, 1 March 2006. Side 7 Globalisation at LM Glasfiber Sales: Employees:

8. EWEC, Athens, 1 March 2006. Side 8 Challenges International expansion strategy Organisation and learning Management of subsidiary Systems, flexibility and response times Supply chain Our customers must be able to buy blades of a consistently high quality everywhere in the world

9. EWEC, Athens, 1 March 2006. Side 9 Value chain changes - before

10. EWEC, Athens, 1 March 2006. Side 10 Value chain changes - today

11. EWEC, Athens, 1 March 2006. Side 11 Partnering on the demand side Before: Standard blades for several customers Annual negotiations Fixed orders Closed R&D Now: Custom-made blades Framework agreements for up to ten years Forecast Integrated development with many iterations Local production

12. EWEC, Athens, 1 March 2006. Side 12 Partnering with a few major suppliers Before Many vendors Short-term contracts Looking for the best price performance Vendor based R&D European based vendors Inventories in 3 locations –Vendor, supply chain, LM Glasfiber Fixed terms/quantities Order per delivery Now: Manufacturing close to our sites –Plans for India Long-term contracts 2-3 years Consignment stock Joint development Tailor-made to LM specification Global production 1 stock –Consignment Electronic forecasting and EDI Market share based

13. EWEC, Athens, 1 March 2006. Side 13 Hardware and software in the supply chain Hardware: Components and materials specified centrally by R&D Local and global suppliers qualified and audited in an ongoing process Comprehensive access control at all locations Ongoing auditing to ensure compliance with QA procedures Software: Local procurement and logistics functions upgraded with respect to resources and know-how Training in joint LM standards and procedures Benchmark and knowledge sharing among our companies LM Glasfiber sources a consistently high quality to all our plant locations from local suppliers or from global suppliers with a local presence, which is one of the reasons why we can supply a uniform product worldwide

14. EWEC, Athens, 1 March 2006. Side 14 Benefits for the wind turbine manufacturers We optimise the supply chain for the wind turbine manufacturers by offering: Reduced market risk Local supply opportunities in local currencies Local employment at the lowest cost Reduced shipment costs Lower working capital Lower CAPEX requirements Triple-Win situation for local area, wind turbine manufacturer and LM

15. EWEC, Athens, 1 March 2006. Side 15 Partnerships lead to complext relations SupplierWTMLM Glasfiber Before Now SupplierWTMLM Glasfiber KAM R&D Q Logistics Finance Service Purchase R&D Q Logistics Finance Service SB R&D Q Logistics Finance Service KAM R&D Q Logistics Finance Service

16. Our strategy and vision

17. EWEC, Athens, 1 March 2006. Side 17 Value chain changes - tomorrow

18. www.lmglasfiber.com