(April 7, 2011)

To our Key Business Partners,

Update on product supplies coming from Japan

Following the recent tragic events in Japan we mourn with the Japanese people and we want to express our deepest condolences.

We felt it appropriate to inform you of actions we and our suppliers have taken to mitigate any negative consequences, and to update you on the current situation. We want to assure you that we have done everything possible to ensure supply chain reliability and the general safety of the products delivered.

General situation

All of our Japanese suppliers’ factories are currently producing. Factories in the northern part of Japan are affected by energy constraints and are producing around 3 to 4 hours less per day due to the energy rationing.

Factories in the south are generally not affected, though the situation is somewhat uncertain due to the well known problems at the nuclear power plant in Fukushima.

As all our Japanese suppliers have European, US and Chinese manufacturing locations, the overall risk of any delivery delays is low.

General Safety

Brammer has required all Japanese suppliers to confirm that they have safety checks in place to prevent any potentially contaminated products being shipped to Europe. Furthermore all European Port Authorities are carrying out checks on vessels originating from the area.

None of the stock held in our 12 National Distribution Centres and our 300+ branches across Europe have been exposed to the radiation from Japan, and we will continue to ensure the highest level of safety.

Detailed Information on our key Japanese suppliers

NSK: Some of their Northern Japanese factories are running with reduced capacity due to the general energy constraints in the area. NSK has a plant that is 70km away from the Fukushima plant but they are able to continue production at almost full capacity.
Low risk – delivery delays not likely.

THK: They have two main facilities in Japan, Yamaguchi in the south and Yamagata in the north. The northern factory’s capacity is affected by the energy cuts but the same products are produced in European and Chinese plants.
Low risk – delivery delays not likely.

SMC: Two of their 18 facilities are slightly damaged but SMC can supply from their other locations in Japan and they are covered with existing stock. The same products are also produced from both European and Chinese plants.
Low risk – delivery delays not likely.

Tsubaki: All four main production sites are running with full capacity for chains according to Tsubaki.
Low risk – delivery delays not likely.

Actions for securing Brammer supplies in Europe

The risk of any delivery delays is low due to the fact that our Japanese manufacturers all produce the same products in alternative plants in other countries. Despite this, we are increasing our safety stock levels for our affected suppliers by pulling forward existing orders and/or placing additional orders.

Our partners also confirmed that they will support us in reducing any negative effect on our supply chain.

Due to our multi-brand strategy, we are also ready and prepared to help our customers switch to alternative brands should the situation deteriorate.

We would like to re-assure you that we will continue to closely monitor the situation with our Japanese suppliers and will do all we can to ensure that general safety, delivery dates and quality standards are maintained to the highest levels.

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