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Marignane, November 5 , 2001 Subsidiaries & Participations Directorate
P – n° 319/01 – AD/LR
P.B S.B to E.M.S.A M.Karalekian HELIBRAS J.Raquin EC CHILE J.E.Drouault Copies: S. Sobotta - Ph. Harache - C.Gras - F.Guisolphe - O.Lambert - P.Galland W. Kortas - E. Mauad - G. Rioult - P. de la Revelière - H. Stell SUBJECT: EC optimization in Latin America
Further to the meeting set up, during Brazilian Epicenter 2001 at Sao Paulo (on October 29-30), with Helibras and EC Chile it was decided to adjust before year end, Latin America Subsidiaries mandate and remuneration, especially to optimize the transfer of EC/ECD customer service business to the subsidiaries in the region. In this context, the allocation of responsibilities regarding Customer Service between the various subsidiaries has been reviewed as follow :
Helibras : Brasil (internal and external customers), Paraguay EC Chile : Chile, Argentina, Peru, Bolivia, Uruguay EMSA : Mexico, Central America, Venezuela, Colombia, Ecuador
It has also been decided to evaluate the possible advantages to create a new subsidiary in the free zone of Uruguay. The following action plan has consequently been established..
Antoine RIVET
Alain DURRIEU
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ACTION PLAN : 1. To clarify definitely if EC Chile Ø can invoice Chilean customers without V.A.T. and customs rights. Ø can invoice Chilean Armies foreign commissions from Chile and can be paid in foreign currency (and identify the place of payment). Ø can invoice non Chilean customers without V.A.T. Ø can deliver to non Chilean customers thanks to drop shipment without having impact to Chile and then reexport. The target is to definitely know if EC Chile needs a non Chilean structure (such as EC Uruguay) to invoice and to definitely decide if EC Chile will act as a Customer Service Distributor or Agent. Target date: 10/11/2001 Responsible: J.E Drouault 1.1 - To build EC Chile preliminary Business Plan (for sales and after sales) with Investment Plan and Recruitment Plan with hypothesis consistent with 1.(for Chile and others countries) Target date: 10/11/2001 Responsible: J.E Drouault 2. To investigate in detail the creation of EC Uruguay, its mandate, its contractual relationship with EC Chile and Helibras, and possibly Emsa and EC, and its remuneration. 2.1 - Preliminary identification of EC Chile and Helibras manpower expenses, chargeable to EC Uruguay (EC expatriates, EC technical assistance, HB personnel involved in military customer support….) Target date: 15/11/2001 Responsible: A. Durrieu + J.E Drouault + J.Raquin 2.2 - Detailed analysis of modalities of creation of “SAFI” (Financial Investment Corporation) and alternate company model and of relevant constraints and required means and evaluation of EC Uruguayan costs associated to its basic mandate. Target date: 15/11/2001 Responsible: A. Durrieu 2.3 - Identification of the consultants/agents contracts to be possibly handled by EC Uruguay. Target date: 15/11/2001 Responsible: J.E Drouault + J.Raquin + SB +SC. 2.4 - Identification and quantification of the business flows to be possibly invoiced by EC Uruguay (consistent with expenses). Target date: 15/11/2001 Responsible: SB +SC + A. Durrieu. 2.5 - Identification of the impact of the 2 basic contractual models on EC Group results: distributorship mandate entrusted by EC to EC Uruguay for selected customers/business flows or conventions between respectively EC Chile and EC Uruguay, and HB and EC Uruguay, (and possibly Emsa and EC Uruguay) for services (technical support, invoicing…) ; and optimisation of the relevant remuneration of EC Uruguay (discount from EC or invoice to EC Chile/Helibras) and of EC Uruguay Balance Sheet. Target date: 20/11/2001 Responsible: A. Durrieu
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2.6 - Preliminary recommendation and analysis of impact on sales organisation. Target date: 25/11/2001 Responsible: A. Durrieu + SB +SC + VW + VN. 2.7 - Validation by EC Management and presentation to E.A.D.S Target date: 30/11/2001 Responsible: P + S +V + Y 3. To consequently adjust EC Chile and Helibras mandates and remuneration. 3.1 - EC Chile: 3.1.1 Based on 2, optimise EC Chile/EC Uruguay respective prerogatives. Target date: 30/11/2001 Responsible: A. Durrieu + J.E Drouault + SB 3.1.2 Optimisation of EC Chile Business Plan and Balance sheet based on 3.1.1 and finalisation of the EC Chile remuneration . Target date: 30/11/2001 Responsible: A. Durrieu + J.E Drouault + SB 3.1.3 Finalisation of EC – EC Chile agreement . Target date: 15/12/2001 Responsible: SB + VN. 3.1.4 Definition of contractual arrangements to be built by EC Chile/EC Uruguay with local network for Chile, Argentina, Peru, Bolivia. Target date: 15/12/2001 Responsible: J.E Drouault + SB + SC. 3.2 - Helibras: 3.2.1 Based on 2, adjustment of HB mandate (from EC) and of HB remuneration. Target date: 30/11/2001 Responsible: A. Durrieu + J.Raquin + SB 3.2.2 Closure of HB subsidiary in Uruguay (if confirmed) . Target date: 31/12/2001 Responsible: HB. 3.3 - EMSA: 3.3.1 Based on 2, possible adjustment of EMSA mandate (from EC) with inclusion of Ecuador. Target date: 31/12/2001 Responsible: SB + VN. 4. Creation of EC Uruguay (if confirmed) 4.1 - Incorporation of the company and nomination of the Board members and management. Target date: 31/12/2001 Responsible: A.Durrieu. 4.2 - Setting up of the company. Target date: 15/01/2002 Responsible: J.E Drouault + J. Raquin. 4.3 - Definition of EC – EC Uruguay agreement (and if need be of complementary conventions) Target date: 15/12/2001 Responsible: SB + VN
