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by Lau Geok Theng with the assistance of Janet Ng

Charmain Tan, founder and CEO of Fun in Ecological Tech Textile (FIETT)1, is facing a common
problem faced by many fellow start-up companies growing profitably. She has appointed
your team to advise the company on how to increase sales and grow the business sustainably.

She is very interested to hear about long term strategies that the company can incorporate
into its business model for a sustainable and growing business. In particular, she has
specified that her management team is interested in an international sales and marketing
strategy which presents global sales potential. Management would also like to know t he
amount of funding they would require and the purposes of these funds.

Incorporated in August 2011, FIETT is an advanced technology and manufacturing company
specialising in the sale and production of eco-friendly, cutting-edge tech textile goods, dedicated
to enhance the consumers quality of life.

Founder and CEO of FIETT, Ms Charmain Tan, lived in Stockholm for a year for her NUS
Overseas Colleges (NOC) program in Stockholm, Sweden, where she experienced temperatures
below zero degree Celsius. At this temperature, people usually experience difficulties operating
their smartphones since they have to put on gloves to protect themselves from the cold. The
young entrepreneur could not find a glove that allowed her to operate her touch screen device
without exposing her fingers to the cold. Seeing an opportunity, she gathered a group, sought
initial capital and started a business.

The initial capital and funding was raised from SPRING2 Singapores initiatives to support start-
ups, and the company has been incubated at the NUS Enterprise Incubator since October 2011.
Around September 2011, they sought patent for their first patent-pending product, ISGLOVES, a
product that solved the aforementioned problem. The product was launched in November 2011
with Sweden as the first target market.

1 You are advised to visit the companys website for additional information which may
not be in the case.
2 Go to for description of SPRING and

the funding available.

FIETTs vision and mission is to go beyond existing frontiers of textile application towards the
synthesis of technology and fashion into the creation of new and innovative apparels to add
value to consumer experiences of comfort, convenience and style in an ecological way.

The companys pilot product, ISGLOVES, is the first hybrid touch screen gloves in the market
to enable users to operate their touch screen devices while keeping their hands warm in the
cold climate. Traditional gloves insulate the fingers electrically, hence disabling the touch
ability. ISGLOVES provides a practical solution to those living in places where harsh winter is

The FIETT team was assembled in May 2011, formed by a diverse team with various expertise
and experiences in management, sales and marketing, supply chain management, as well as
product design and development. As a start-up, the FIETT team is small and composes of five
main team members, as shown in Figure 1. The detailed descriptions of the members are shown
in Exhibit 1.

Figure 1. Organisational Chart of FIETT


Designer/ Creative Operations Director Production/Quality

Director Control Director

The team was assembled by the CEO and founder, Ms Charmain Tan. During her stay in Sweden,
she recruited her present Marketing/Sales Director, and the duo took part in a competition,
introducing the concept of touch sensitive ski mittens, where they received positive feedback on
the innovation. From there, the team expanded as they ventured to develop the actual product
to consumers.

Smart phones, tablet computers and other hand held touch screen devices are capacitive,
relying on faint electrical signals from ones fingers. Traditional winter gloves insulate the
fingers, which prevents the use of these devices due to interferences with the transmission of
the electrical impulse.

Due to the recent increase in touch screen devices, gloves which allow users to operate on these
touch screen devices have started emerging. However, as these gloves were mainly targeted at
countries such as the United States where winter is not so harsh, they do not provide sufficient
warmth and protection for those living in harsher winter conditions up north and those staying
in the cold for long, such as winter hikers, snowboarders and skiers.

FIETT has developed and manufactured the ISGLOVES, a patent pending, eco-friendly touch
sensitive snow mitten for touch screen devices. It is the first touch glove-mitten combination,
with the conductive gloves encapsulated within mittens, allowing users to use their touch
screen devices with precision while keeping their hands warm outdoors in the cold for long
periods of time. The FIETT team seeks to oversee the whole process from idea and design to
sales and marketing. Production has been outsourced to manufacturers in China.

ISGLOVES is made up of two layers, as shown in Figure 2. The inner glove is made of bamboo
and conductive polyester. It also has hypo-allergic properties and prevents bacterial growth.
This inner glove is encapsulated in a mitten cap made from 100% recycled polyester, which
offers enhanced insulation against extreme cold, as warm air is trapped between the fingers for
more effective protection, facilitated by the 3M Recycled Thinsulate lining (Figure 2c). The
outer mitten cap can be removed easily and conveniently by flipping over the fingers when

To fulfil their vision to intertwine technology and fashion to produce environmentally friendly,
functional and stylish wear for daily activities, FIETT has developed new models to meet the
demand of the three main target markets, namely, tech gadgets, leisurewear and sportswear.
The models developed for each target market are based on the 3S, respectively Simple, Stylish,
and Sports.

Tech gadgets (ISGLOVES Simple): Positioned as a recognizable accessory for iPhone, iPad and
other touch screen devices, ISGLOVES serves as the perfect complement and winter accessory
for these devices. The ISGLOVES Simple is made up of a single basic glove with conductive,
hypo-allergic polyester yarn to allow for precise and accurate typing on touch screen devices.

Leisurewear (ISGLOVES Style): As the aim of ISGLOVES is not only to be a tech gadget
accessory but also a daily wear accessory, it should be smart looking and fashionable. The
ISGLOVES Style is made to be sleek and stylish, with the outer shell made from recycled PU
leather and recycled polyester instead.

Sportswear (ISGLOVES Sports): Finally, the original ISGLOVES were set out to target the
sports and outdoor wear market, which marked the initial target market of the company. Since
its launch in November 2011, the ISGLOVES Original has been remodeled based on test
reviews and customer feedbacks, giving rise to the birth of ISGLOVES Sports. These gloves are
for the sporty and outdoor users of touch screen devices. Unlike ISGLOVES Style, the outer
shell of the Sports model is made of 100% recyclable polyester, and is windproof and
waterproof to cater to the needs of its target market.

Figure 2. (a) ISGLOVES showing the outer mitten cap (left) and inner gloves (right); (b)
ISGLOVES on a touch screen device3; (c) Materials and structure of ISGLOVES



Recycled Polyester
Windproof layer

Polar Fleece
Cushion layer

Thermoplastic Polyurethanes
(TPU) Waterproof layer

R70 Recycled Thinsulate

Heat insulation layer

Velvet Tricot
Minimise abrasion with skin



China was chosen as the production base given its renowned manufacturing capabilities. A myth
that most foreigners have of China is that it is a low labor cost country given its huge population
of 1.35 billion people. The revision of labor laws and other policies in recent years have resulted
in the labor cost of China being higher than countries such as India and Vietnam. The main
reasons why China was chosen were speed and convenience. Many factories in China are able to
take an initial sample and mass produce a product with minimal lead time.

Many new projects could take off quickly by putting down a deposit as the manufacturers would
take care of the rest like tooling, production flow, import and export arrangements as well as
freight forwarding. Finding a suitable factory is easier with the introduction of online platforms
like,, and, which provided a boost to smaller
manufacturers who were previously unknown since they are now able to showcase their
potential to the international community. Tradeshows like Canton Fair,4 which is China Import
and Export Tradeshow, also provided a one-stop platform where foreign importers could meet
many manufacturers in China all at once to explore production projects.

ISGLOVES inner gloves fabric was tested and fabricated in SmartTextiles Prototype Factory.5
SmartTextiles is a department in the Swedish School of Textile located in Boras, Sweden and
they support technical textile innovation by making prototypes of their conceptual textiles. The
prototype of ISGLOVES, which included a knitted inner gloves encapsulated within an outer
ski mitten, was subsequently done by a tailor in Stockholm, Sweden.

Despite having the prototype and schematic pattern in hand, it was tough searching for a
manufacturer in China because the inner and outer gloves required different workmanship. Few
manufacturers were able to make the complete product. The ecological requirement added to
the challenge of making this product because this was something new in China and most of the
suppliers did not have the necessary ecological yarns or fabrics. In all, seven categories of
suppliers or manufacturers had to be secured and coordinated to make the ISGLOVES (see
Figure 3). It was tough negotiating with the suppliers and manufacturers because FIETT was
new and the volume of the initial orders was low.

Figure 3. Production Flow Chart of ISGLOVES


Although FIETT had successfully applied for patent coverage for the ISGLOVES on 27
September 2011 and signed confidentiality agreements with the Chinese manufacturers,
enforcement of intellectual property in China was always a challenge. FIETT exercised internal
control on the production process by revealing as little product information to the
manufacturers as possible. One advantage of using many suppliers and manufacturers to
produce the ISGLOVES was that they did not have the full picture of the complete product.
Manufacturers were chosen such that they did not know each other or were far apart so they
could not communicate and collude. FIETT also controlled the movement of shipments from
one party to the next, so they would not be aware of the identity of various parties in the work

The eco-friendly ISGLOVES are meant for users of touch screen devices in cold winter weather.
It is not a demand which exists in the Singapore market but rather in countries such as Sweden.
The initial target market for the products is the Scandinavian countries. In terms of smartphone
penetration rate, Sweden is ranked third highest in the world, together with three other
Scandinavian countries in the top ten, according to a study carried out in December 20116.

These countries often experience low temperatures during the harsh winter (Figure 4) and
there is a huge demand for a good pair of gloves. Many Scandinavians are willing to pay for good
quality gloves. The estimated production value of gloves in Sweden has increased from USD9.92
million in 2002 to USD19.7 million in 20107. This amplification in the production value of gloves
has revealed the growth and market potential of the gloves industry in Sweden, which seems to
be picking up since 2002 due to higher willingness to spend on gloves among Scandinavian
consumers. The market, however, is dominated by big players and it is essential for new
entrants to be innovative and target a unique differentiation point in order to enter this market.

Figure 4. Monthly Temperatures in Stockholm, Sweden8


There are three basic technologies used in the recognition of a persons touch, namely, resistive,
capacitive and surface acoustic wave. Currently, only the first two are commonly used for touch
screen smart phones and other hand held devices in the market.

The resistive touch screen system comprises of a glass panel covered with a conductive and
resistive layer held apart by spacers. A scratch-resistant layer is placed on top of the entire
setup. An electrical current runs through the two layers when the screen is operational. When
touched by the user, pressure from the finger causes the conductive and resistive layers of
circuitry to be in contact, causing a change in the circuits resistance. The change is detected and
registered as a touch as long as the two layers make contact, regardless of whether the pressure
was from a finger or a stick9.

Capacitive touch screen systems, on the other hand, are composed of a layer of stored electrical
charges positioned on top of the glass panel of the screen. When touched by the user, some
charges are transferred to the user, decreasing the charge on the capacitive layer. The decrease
is measured and calculated by the computer to determine the exact location of the touch event
according to relative differences in charges at each corner. The source of the touch is important,
and is usually input by the finger or anything conductive in nature10.

In the past decade, the growth of the touch screen industry has been explosive, particularly with
the introduction of the iPhone in 2008 and iPad in 2010. Together, these two Apple products
made it more common for people to own their private touch screen device and tablet
computers, resulting in an increase of sales value of touchscreen devices from $4 billion in 2009
to $13 billion in 2011.11

The touch screen market has been forecasted to triple by the year 202212. The rapid growth and
potential of the need for touch screen devices showed a trend towards incorporating the
technique in everyones personal life to encourage better interactions between human and
electronic devices. As a result, people tend to value convenience and user-friendliness.

Looking at this trend, as interaction and adoption of these devices increase, it will resultantly
create a great open market for accessories to complement these touch screen devices. Riding on
the increasing trend of touch screen devices, it should be profitable to compete on a parallel
platform to the trend setters.


Technical textiles are high performance functional fabrics developed for specialized, non-
aesthetic applications. Their global consumption has increased by almost two-folds over the
past 15 years and the total global sale of technical textiles is expected to reach USD 126 billion
by 201013 (Figure 5).

Although US and EU countries were traditionally the major manufacturers and consumers of
these functional fabrics, Asian countries like China and India are emerging as the chief
production centers of technical textiles as well (Table 1).

12 ews/ a rtic l es / id/4067 / t ouc hs c re e n m arket
to reach-14 bi llioni n px

The intense competition suggests a more aggressive environment in terms of time, money and
resources invested by research and development firms to develop better and more innovative
technical textiles. This further expands the pool of possible products arising from these
functional fabrics, complementing its development.
Recent innovations in the development of these technical textiles include the 3M Nextel
Continuous Ceramic Oxide fibres 14 , Lenzing FR BLACK 15 and DOW SOFT TOUCH
Polypropylene Resin16.

Figure 5. World Consumption of Technical Textiles, 1995 2010 (in volume and value terms)17

Table 1. World Consumption of Technical Textiles by Broad Region, 1995 2010 (000 tons)18



Eco-friendly fashion is the manufacturing of clothes that takes into account the environment,
health of consumers and working conditions of people in the fashion industry. Eco-fashion
clothes are made out of organic raw materials and do not involve the use of harmful chemicals.
The implementation of eco-fashion will bring about a more sustainable fashion industry19.

There is also an increasing trend for adopting eco-friendly and organic fashion products in the
Scandinavian countries, in particular, Sweden, Denmark and Norway. According to the Yale
Universitys Environmental Performance Index (EPI) 20, these Scandinavian countries are found
in the top ten rankings of the world in the implementation of eco-friendly measures. In addition,
they are found to be improving over time, as shown in Figure 6.

Following the market trends discussed above, it seems logical that a new innovation made with
functional and ecological materials to serve as an accessory to a touch screen device will be
lucrative and profitable, as the market is still new with much growth potential.

Figure 6. Plot showing how well Sweden is doing overall in terms of their EPI performance (left to
right), compared to how much they are improving over time (bottom to top)21


The number of mobile subscribers using smart phones is increasing rapidly. A research study
done in 2010 showed that 7 out of 10 Swedish, 22% Norwegian and 27% Finnish mobile
subscribers use smart phones22. There is an apparent strong uprising trend of smart phone
subscribers in Europe, especially Scandinavia.

At present, most smart phones are touch screen enabled, with 55% of smart phones in the
market touch screen enabled, according to a study done in 201023. Therefore, a growth in the
number of smart phone users would also correlate with a growth in the number of consumers
using touch screen devices. In 2011, the total shipments of smart phones increased by 61.3%
from 2010, contributing 31.5% of all handsets shipped24.

The increase in usage of smart phones and other touch screen devices will create a wide market
for accessories and gadgets. As mentioned earlier, most touch screen devices adopt the
capacitive technology, which is inhibited by normal gloves. This becomes a problem for users in
cold countries to use their touch screen devices on the move. Consequently, there is a demand
for touch screen enabled gloves adjusted for the cold.

Touch sensitive gloves have been introduced a few years ago to enable users to use their touch
screen devices during winter, mainly in the US and some European markets. The bigger players
in the market include Agloves, Northface, Dots Gloves and Gaspar Gloves.


At the moment, Agloves seems to be the biggest and stronger competitor in the knitted touch
screen gloves industry. Agloves supplies the market with winter gloves interknitted with
silver and acrylic yarns that are conductive beyond the tips.

The gloves are made with actual silver, and the silver-nylon threads are knitted throughout the
glove25. As a result, their gloves are not just restricted to a few fingertips, but are able to conduct
bioelectricity across the whole glove. This provides a larger surface area for conductivity, and in
the event that the fingertips are not conductive enough due to cold and dryness, bioelectricity
from the palm is also able to flow through the glove to the fingertips to maintain the connection.

Agloves is mainly focused on the end consumer, and is sold through e-commerce via the
Agloves website (Business-to-consumer, B2C) for USD 17.99. The company maintains good
customer relationships with an easy to use website, and operates on an honour system where
customers can change products that are deemed as defective. Their biggest market share is the
United States and Canada. Although they have presence in Europe, their market share is still
low, and only Agloves Sports is available in Europe. Moreover, the gloves are not suitable for
extreme cold as they are relatively thin.


Northface supplies the market with felt-textured sporting gloves which are stretchable with a
silicon grip at the palm of the hand, giving the gloves an anti-slip feature. The index finger and
thumb are supplied with conductive fiber fabrics, X-Static. The X-Static fabric has a layer of
natural silver bonded permanently to the fiber face.

24 rk et ing to ol s / l a tes t -mobile-stats

The E-Tip also features a waterproof shell to repel rain or snow, yet is breathable enough to
allow moisture from the hand to evaporate. The X-Static fabric is also anti-bacterial, and helps
regulate moisture and temperature, allowing the user to stay cooler in summer and warmer in
winter. 26

The gloves are sold at USD 40 via e-commerce on the Northface website (B2C), and are largely
distributed at Northface retail outlets, Apple premium resellers and other bigger sports
distributors (B2B). Northface has strong company branding and the E-Top gloves have high
dexterity with a good grip. However, the gloves are not entirely waterproof, and are not warm
enough for cold winters. Besides, the conductive tips are easily battered and worn out, thereby
losing their function over time.


Dots Gloves supplies the market with high quality knitted gloves made out of lamb wool, and
sewn with conductive threads on the thumb, index and middle fingers. 27 It is treated to give an
extra softening effect, and is sold through e-commerce on their website online (B2C) and
through collaborations with distributors (B2B). The iTap gloves are priced at USD 20.

Though relatively cheaper, Dots Gloves is unable to handle high order volumes and has limited
variety of size and design. At the moment, the iTap gloves only exist in one size and one design.
This could indicate their inability to meet market demands, and the gloves are not adapted to
the users personal size and preferences. In addition, the gloves do not provide sufficient
warmth required at colder climates.


Gaspar Touchtec supplies the market with sleek, fashionable leather gloves that are touch
sensitive. It is a patented nanotechnology that provides new functionality to a variety of textiles
and leather. The technology mimics the human body, is invisible and possesses anti-microbial
qualities, while retaining the comfort and characteristics of the leather. 28

The Touchtec gloves are mainly sold through e-commerce (B2C) and wholesaler (Business-to-
business, B2B) channels. Prices range from USD 118 to USD 485. The brand is endorsed by
celebrities, and provides a wide range of designs which can be customized according to user
preference. However, due to its high price, the gloves appeal more to the high-end market, and
are not warm enough for cold winters.


The market for touch sensitive gloves can be said to be rather saturated, with matured touch
sensitive gloves already available in the market, ranging from USD 17.99 (Agloves) to USD 485
(Gaspar Gloves). Some of these gloves provide functionality (Northface) while others offer
simplicity and value for money (Dots Gloves). Moreover, these regular gloves have several
limitations as outlined in the following section.


Warmth: Most mass-market touch sensitive gloves are currently made of woven fibers, with
gaps present at the finger bases, making it not windproof or waterproof. Besides, there is also a
limit to how thick the woven fibers can be knitted together, thereby limiting the ability of these
gloves to keep the users hands warm during harsh winters, especially in Europe and the
Scandinavian countries.

Precision: Gloves present in the market largely offer only a small zone of conductivity, and in
some cases, offer only one size. This can result in loose-fitting gloves and limited precision when
operating on touch screen devices.

Conductivity: Regular gloves present in the market are mostly only conductive in 2-3 fingers,
which limit the usage and flexibility of these gloves. In addition, the conductive tips are left
exposed to daily physical activities and can be easily grazed, affecting the functionality of the
gloves after long periods of usage. This can be unfavorable for winter sports enthusiasts due to
the frequency of contact with equipments.

Eco-friendliness: Not many existing touch sensitive gloves in the market are ecologically
friendly. Resins, nylon and polyester used in making the gloves are less sustainable materials
and not easily biodegradable. Eco-friendliness is something valued by the Scandinavians as part
of their lifestyle, yet is often overlooked by product designers from the US and other parts of


FIETT has included the limitations in gloves offered by current competitors into their
consideration in the development of their pilot project, ISGLOVES. On top of that, they have
value-added properties to improve the overall user experience of their product.

To provide users with better warmth, the touch sensitive inner glove of ISGLOVES is
encapsulated within an outer mitten, which traps heat within the gloves and provides additional
comfort to users. The outer mitten is reinforced with the 3M Thinsulate Insulation technology
made from recycled materials to provide hands with extra warmth when needed. This material
is able to provide warmth to the user more efficiently compared to other materials of the same
thickness. The outer mitten cap can be removed temporarily to allow users to access their touch
screen panels when required.

The inner glove of ISGLOVES is also made conductive polyester intertwined with bamboo
yarns, making the whole glove conductive and the ability to use all 5 fingers on the touch panel.
Besides homogenous conductivity, it is also made out of soft, sleek and elastic materials to
enable the gloves to take after the shape of the users hands. This well-fitting feature of the
gloves provides the user with better precision when operating on touch screen devices on top of
the comfort and convenience provided.

To enhance the ecological aspect of the solution, the company made use of eco-friendly yarns
and fabric in the production of ISGLOVES. The outer mitten glove is made of recycled polyester
from collected PET bottles.

Lightweight polyester is frequently used for shell jackets and base layers, as it is windproof,
waterproof and resists soil and stains. To boost the windproof and waterproof properties of the
outer mitten, the outer layer of the polyester is treated with a water repellant chemical, and the
inner side bound with a Thermoplastic PolyUrethanes (TPU) membrane to ensure that water
will not seep through the layer when water or snow builds up in the mittens.

Bamboo fiber used in the inner glove is renewable and sustainable. Bamboo is a grass, which
reduces the need for replanting, thereby helping to reduce topsoil erosion. Unlike other textile
plants, bamboo is also able to thrive naturally without pesticides or fertilizers. It is also able to
grow up to a yard a day, garnering a yield per hectare 10 times greater than cotton, while
efficiently utilizing sunlight and greenhouse gases and converting them to biomass. As a result,
bamboo is among the worlds most sustainable resources29.

Using bamboo as the primary material for the inner glove gives ISGLOVES the added
advantage as bamboo is anti-bacterial, hypo-allergic and prevents the accumulation of sweat
within the gloves due to its ability to absorb 60% more water than cotton. This is especially
useful for users who may have sweaty palms or engages in large amount of physical activities,
such as winter sports lovers.

On the whole, ISGLOVES is a feasible hybrid of existing solutions in the winter gloves and
touch sensitive gloves market, targeted at solving the limitations of current products. While
doing so, ISGLOVES also offers several additional features to bring more style, warmth,
comfort and convenience to its users.

ISGLOVES differentiates itself from its competitors by creating a new, unknown market space
and making competition irrelevant through value innovation. The companys main strategy is to
avoid competing on mainstream attributes, but focus on attributes which competitors were not
able to satisfy, thereby creating a differentiated product for consumers.

In addition, the additional attributes provided by ISGLOVES, such as eco-friendliness enables

the company to charge a higher price for a better value. As shown in the previous sections,
Sweden and many Scandinavian countries are well aware of nature and prefer to consume
sustainable products. A survey made by the company in February 2011 showed that a higher
price is acceptable to consumers for a product that is environmentally friendly compared to one
that is not.

Consequently, the company is successful in competing on differentiated attributes, thus making

it possible to target a relatively saturated market and stand out from its competitors. Studies
and responses from reviewers have shown that ISGLOVES has great potential and a huge
market demand to fulfill.

FIETT has been relying on the support from government and private initiatives to support
start-ups since it started. To bring the business to the next level, FIETT needs to have a clear
strategy to sustainably grow its business to attract investors, and show results to persuade
investors that FIETT is worth their trust and confidence and convince them of FIETTs

FIETT participated in DEMO 2012 and won the challenge of best alfa-pitch.30 This gave the
company attention and attracted investors to open their eyes for the growing business. At the
same time, it attracted some newly graduating students who wanted to join the team.

In your presentation, Charmain hopes you will articulate an international sales and
marketing strategy for the ISGLOVES and its global sales potential. She also would like
you to share a long term vision for the company beyond the glove products: What other tech,
stylish and ecological products can the company create and to what markets can these products
be sold to?



Position Name Education Work Experiences Responsibilities in FIETT

Founder & CEO CHARMAIN National University of Singapore (NUS) Interned at Episurf Medical AB, Overall operations and
TAN Graduate Sweden marketing, product and finances of company
Major in Statistics business development
Minor in Technopreneurship
Took entrepreneurship courses in
Stockholm School of Entrepreneurship
Product Designer/ CIA ZHI YUN NUS Graduate Interned at Wijaya Furniture Pte Design of gloves, logo and
Creative Director major in Industrial Design Ltd, Singapore Business company branding
Development Department
Operations FITZKHOON NUS Graduate Interned at HiNation AB (Sweden) Operations, administrations,
Director LIANG Major in Science Engineering International Sales Manager, marketing products to
Minor in Technopreneurship marketing fully solar-powered light distributers, building
Took entrepreneurship courses in SESS source and charger for private and companys branding
professional use
Production/ TAN YAN NUS Graduate Interned at DE Global, Shanghai Liaising with China
Quality Control LIANG Major in Mechanical Engineering Project Assistant, Sourcing suppliers, quality check and
Director Minor in Technopreneurship department (helping overseas control, ensure smooth
Took entrepreneurship courses in clients to source for local China production of ISGLOVES
Fudan University, China factories to manufacture their
products, manage factory-client



DBS was established in 1968 as the development bank of Singapore and has played a catalyst role in helping Singapores economic development,
which includes providing financing to many local companies in the early days.

In 2000, DBS established an enterprise banking division, which is dedicated to serving the needs of our SME customers. For example, it was the first
local bank to implement a micro-loan scheme in 2001/2002.

Prior to the formation of the enterprise banking division, DBS service SMEs via their branch network; corporate banking and commercial loans
department and their subsidiaries, DBS Finance and DBS Factors (which has been incorporated into the current enterprise banking division).

Financing for SMEs

With its long history of supporting and nurturing enterprises, it has evolved beyond financing to help entrepreneurs in building their businesses,
protecting their assets and unlocking their wealth. Besides financing solutions, it offers cash and risk management solutions to SMEs (such as foreign
exchange and interest rate hedging products) and yield-enhancing structures (such as currency linked investment and callable daily accrual range

DBS financing solutions are broadly divided into two categories. The first is providing credit for working capital such as business loans, accounts
receivable financing, overdrafts, loan insurance, project financing, revolving credit facilities and access to debt capital markets or private equity

The second category is in fixed asset acquisition such as commercial and industrial property financing and equipment hire purchase.

Information for this Appendix is taken largely from a question and answer session with Mr Lim Chu Chong, Head of Enterprise B anking, DBS Bank

which appeared in SME Magazine, 18 May 2012.

Criteria for Financing

The general credit principle applies for financing. DBS looks at the borrowers repayment ability which includes its business prospects, business
model, management expertise and the business ability to generate cash. DBS has provided S$1.5B in loans to SMEs in the first quarter of 2012. This
is a 7% increase year-on-year.

Under the current economic uncertainty, DBS has not tightened its financing for SMEs. In fact, the SME franchise is one of the banks strategic
priority and DBS will continue to invest and grow this segment. DBS has opened its sixth enterprise banking centre in Tai Seng in April this year and
it is looking to open another enterprise banking centre in Tuas in the next 12-18 months.

Banks like DBS work best with entrepreneurs who are transparent, willing to share information and who treat the bank as a long term business
partner. These allow the bank to fully understand the SMEs business over a period of time, builds trust, and allows the bank to assess the risk factors
more confidently. Entrepreneurs should not try to hide their risk factors from the bank. In many cases, banks can help to mitigate many of these
risks for the SME by structuring appropriate facilities.

The cooperation between the entrepreneur and his bank is a long-term relationship built on trust. Therefore, when choosing a bank, entrepreneurs
should look for one that is committed to the SME business for the long haul, with low staff turnover rate among its relationship managers.