I.V. FLUID (BFS TECHNOLOGY)

An indication of average landed cost is provided to assist the local producer to gauge initial exporting costs to a particular country. These costs do not include any clearance charges, duties/taxes or local distributor mark-ups. It should also be noted here that many producers make a particular product in various quality grades and this is reflected in their final price for these products. While these producers may have a `base’, `medium’ and/or `high’ price and/or quality levels, these price ranges cannot be easily identified from the trade data as the `product mix’ varies from country to country and, therefore, all statistical costs are averaged out within the specific product HS Code. It should also be noted that the variations in costs are also affected by the cost of the raw materials used for producing the product. High quality and pure raw materials are obviously more costly than their cheaper lower quality or synthetic counterparts and, hence, this is also reflected in the final price of the goods. It must be stressed here that within the above product ranges there are considerable costs variations which can be exit due to the `quality grade level’ (high/medium/low) of the products, the raw materials used in the production, the type of packaging used, the transport, logistical, distribution costs, the `product mix’ being imported, and the market price acceptable in the target country ñ which would be based on GDP, available disposable income and demand. As an example, a third world country is unlikely to import large amounts of high quality products as the local GDP and income compels the local populace to purchase lower cost/quality products. The converse would be true in developed western countries. It is likely for these reasons that there could be considerable landed cost differential between the countries. This information should assist local KSA companies to ascertain, in a very general manner, whether their respective products are likely to be competitive in the above identified export markets or not. Landed costs, by sea shipments, are normally based on CIF value – purely as a general guide, it is estimated that the variation between FOB and CIF costs could be somewhere in the region of 10% to 15% of FOB. Although the U.S. market comprises almost 70% of the total world market for IV solutions, the market for third world and emerging nations is growing much faster and presents a tremendous opportunity for the IVPC Facility™. This growth is due to the building of better and higher quality health care institutions and other health care infrastructures in areas once deemed dormant. World market growth is driven by population increases and constant up-scaling and sophistication of health care delivery. As part of this up-scaling, IV infusion therapy is becoming increasingly important in overall health care treatment regimens as new developments in antibiotics and other medications used in areas such as chemotherapy, burn centers, and renal/peritoneal dialysis centers favor intravenous use and application. Many countries continue to rely on imported product, which is often too expensive for the general population to afford. Frequently, where product is made locally, the quality is poor and the costs are still high. In addition, the lack of inexpensive and readily available supplies of IV solutions in many developing nations has lead to a high incidence of death from non-mortal injuries and non-terminal diseases. The IVPC Facility™ provides an immediate and inexpensive remedy to this situation. The economic advantages of producing IV solutions locally in emerging and medically developing nations via EWMA IVPC Facility™ can result in an extremely short return on initial investment. Profitability can be established at only 50% production capacity. Direct production costs using U.S. cost figures are 45% to 65% lower than current market pricing for primary product lines. Under the U. S. calculation. direct and indirect labor costs comprise the largest single cost element. In emerging nations, where the cost of labor is much less and the cost of IV solutions often is much higher, the actual production cost figures can be 60% to 90% lower than market pricing. Secondary product lines with significantly higher profit margins can be introduced at any time to greatly enhance profitability. Long distance shipping costs are not incurred with the regional target market creating significant savings on distribution costs. Demand for IV solutions is so great that should production exceed local demand. opportunities for national and export sales are unlimited in the foreseeable future. Local labor is trained in the technology and employed by the facility. The efficiency of the technology allows for a small staff of personnel to maintain rated production capacity. Most raw materials are available locally.