RFI – In Commercial Confidence

Request for Information for:

Direct Materials Supply - PALLETS

Deadline for Responses to this RFI

24.09.2010

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RFI – In Commercial Confidence

Contents

REQUEST FOR INFORMATION FOR:.............................................................1

DIRECT MATERIALS SUPPLY - PALLETS....................................................1

INTRODUCTION................................................................................................3
Purpose......................................................................................................................................................3

BAT Corporate Background ..................................................................................................................3

RFI Objectives..........................................................................................................................................3

Contacts.....................................................................................................................................................4

Confidentiality and Liability Statement.................................................................................................4

IMPORTANT KEY POINTS FOR RFI RESPONDENTS...................................5

General Points to Note.............................................................................................................................5

Timetable and Instructions for RFI respondents..................................................................................6

Accuracy of Documentation....................................................................................................................6

Shortlist, Discussions on proposals and Notification of decision.........................................................7

STRUCTURE OF YOUR PROPOSAL..............................................................7

Management Summary & Response Content.......................................................................................7

Detailed Response to RFI........................................................................................................................7

Company Background Information.......................................................................................................7
Other Commercial Issues.......................................................................................................................8
3.2.2Experience & Qualifications..........................................................................................................8
Implementation......................................................................................................................................9

BAT RFI CHECKLIST:......................................................................................9

APPENDIX A - PRICING TEMPLATE ...........................................................10

APPENDIX B – SPECIFICATION OF REQUIREMENTS...............................10

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RFI – In Commercial Confidence

Introduction

Purpose

The purpose of this RFI is to solicit a detailed commercial response from your
organisation in relation to the range of products and services you are able to
supply. This will allow BAT to complete an evaluation to identify a single supplier
solution for the provision of Direct Materials Supply provider. The information
provided by BAT will also permit your organisation to map and evaluate your
suitability for BAT’s specific requirements. BAT is investigating a range of
potential suppliers, of whom a subsequent shortlist may or may not be invited to
attend a formal meeting to discuss the commercial proposal.

BAT Corporate Background

British American Tobacco is the world’s second largest quoted tobacco group, with
a market share of 17.1 per cent. With more than 300 brands in our portfolio, we
make the cigarette chosen by one in seven of the world’s one billion adult
smokers. We hold robust market positions in each of our regions and have
leadership in more than 50 of the 180 markets where we do business. The Group
has 52 factories in 44 countries, processing some 660 million kilos of leaf and
producing some 689 billion cigarettes in 2006. Our companies, including
associated companies, employ more than 95,000 people worldwide.

Our consumers – adult smokers – drive everything we do. Our goal is to satisfy
consumers’ demands better and more profitably than our competitors. We invest
effort and care in understanding consumers’ preferences, and we know that just
as adults make informed choices about smoking, adult smokers make informed
choices about brands.

Our brand strategy differentiates us from our competitors and underpins our
approach to product development. We continue to build a focused, segmented
and differentiated brand portfolio and allocate resources to a full range of brands
deployed in the key industry areas that offer the most robust source of volume
and profit growth.

BAT’s key brands are comprised of the Global Drive Brands plus 2 (Dunhill, Kent,
Lucky Strike, Pall Mall, Vogue and Viceroy) in addition to several Centrally
Managed Brands.

To view more on British American Tobacco please visit www.bat.com

RFI Objectives

This RFI aims to examine and review the most appropriate in terms of quality and
cost solution for the provision of Direct Materials Supply. The winning supplier
must clearly demonstrate the ability to consistently and reliably meet BAT’s
requirements and expectations.

Key outcomes that BAT is focussed on achieving are:

(a) Delivery of a high quality products meeting BAT requirement,

(b) Cost effective supplier focused on continuous improvement ,

(c) Introduction of a flexible methodology that can react to rapid

and planned changes to our business strategy,

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RFI – In Commercial Confidence

(d) Delivery of proactive account management supported with

qualitative and quantitative management information.

(e) Reduce pool of suppliers for commodities in scope of this

document

The main criteria for choosing a successful provider will be:

 Quality and feasibility of recommended supply solution

 Ability to aggregate all commodities presented in the RFI document

 Total Cost of presented solution and pricing model transparency

and stability

 Compliance to BAT requirements presented as preferred

cooperation model

 Supplier Experience & Best Practices

Contacts

Any queries on this tendering process should be directed in written to the BAT
Representative (Primary contact) listed below by the dates in table in point 2.2.
No other BAT employee is to be contacted regarding this RFI. Any attempt by a
supplier to discuss the content of this document with any other BAT employee or
any third parties could result in supplier being excluded from the selection
process.

Commercial Contact
Name Remus Tulea Ionica Popescu
Title Procurement Procurement Manager
Manager
Mobil 0721 201 586 0729 199 200
e remus_tulea@bat.c Ionica_popescu@bat.
Email om com

Confidentiality and Liability Statement

Unless otherwise indicated, the copyright in all of the Documentation issued to

you belongs to BAT, and the Documentation is to be returned to BAT or destroyed
following your RFI response. The contents of the Documentation must be held in
confidence by you and not disclosed to any third party other than is strictly
necessary for the purposes of submitting your RFI. If you need to involve other
parties in the preparation of a response this must be cleared with BAT in advance.
You must also ensure that a similar obligation of confidentiality is placed upon any
third party to whom you may need to disclose any of the Documentation for the
purposes of the RFI. BAT may require that the additional parties sign a non-
disclosure agreement.

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RFI – In Commercial Confidence

BAT will respect the confidentiality of any proprietary information, or abide by any
mutually agreed non-disclosure agreements as appropriate. However, the RFI
respondent must make known in advance any such considerations.

This RFI document provides you with information which is confidential and
business-sensitive to BAT, in order for you to understand BAT business needs in
this particular area, and to enable you to propose a solution to meet those
business needs. You are therefore reminded that any information provided as part
of this project is confidential in nature. No information about BAT and its business
activities, provided to you in this document, are to be divulged or otherwise made
known to any third party, or to any business area within your organisation,
without the explicit written agreement of the person referred to in Section 1.5.

Important Key Points for RFI Respondents

General Points to Note

You shall use this RFI and any other information furnished to you under this RFI
solely for the purposes of responding to this RFI. All such documents and
information you receive shall remain the property of BAT, shall be kept
confidential and shall be returned to BAT on request. Reproduction of any part of
this RFI is authorised only for the preparation of the response. You shall ensure
that all such copies are destroyed when no longer required in connection with this
RFI.

BAT reserves the right to accept or reject any proposal.

Please do not make your proposal elaborate with respect to binding or

presentation. A simple straightforward, economically reproduced proposal is
strongly recommended. BAT values the quality, relevance and responsiveness of
proposals and the inclusion of general unsolicited information should be avoided
unless its inclusion supports or adds innovation to the proposal.

You shall respond in your proposal either that all terms and conditions are
acceptable or that some are acceptable and some are not. Underline or highlight
those words, phrases, sentences, paragraphs, etc. that are not satisfactory and
note any exceptions by referencing the appropriate article number as well as a
brief explanation and an indication of an acceptable alternative. Any exceptions
will be taken into consideration when evaluating your proposal.

BAT will require that the response to this RFI (if accepted) and any amendments
thereto, agreed by all parties, will become part of any resulting contract.

BAT reserves the right to further discuss operational, service or quality issues with
any potential supplier.

Under no circumstances will BAT entertain any uninvited marketing approaches in

respect of this business either during the selection process or subsequently. Any
approaches to BAT outside of those prescribed in the RFI documentation will be
rejected and may result in that company is removed from the selection process.

Respondents should be aware that BAT’s Procurement Policy restricts employees

involved in responses, and their managers, in accepting offers of hospitality whilst
selection is in process.

In the event it becomes necessary to revise, change, modify or cancel this RFI or
to provide additional information, an amendment will be issued to all recipients of
this RFI.

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RFI – In Commercial Confidence

In the event that you decide not to respond to this RFI, please give written notice
of your decision as soon as possible to the above address, but no later than the
date specified in time table below, returning all documentation.

Any costs or charges arising out of your proposal or in any way incurred with
respect to the consideration of your proposal, whether or not finally submitted or
accepted, shall be borne by yourself.

Timetable and Instructions for RFI respondents

Important: all timescales are forecasts and will be subject to change by BAT, at all
times participating parties will be informed of any movements on key dates.

Activity Date and

Time

(1) Selected suppliers briefed and presented the general

information on the Project (background, scope, requirements and TBA
supplier selection process)

(2) RFI Issued – BAT Formally issues RFI documentation TBA

(3) RFI Confirmation of Intention to Respond – participating supplier

confirms intention to submit a proposal via an email. This confirmation is TBA
to be sent to the BAT Contact as listed in Section 1.5.

(4) Supplier Queries – all supplier queries are to be submitted in written

by those particular dates. BAT will endeavour to respond to the query
within three working days unless the supplier is notified otherwise. BAT
reserves the right not answer any other questions after this period. All TBA
questions subject of possible interest to all suppliers will be answered
and distributed to all process participants.

(5) RFI Return Deadline– suppliers are required to submit their completed
RFI response by email to contact details mentioned in Section 1.5. TBA

(6) RFI Presentations – All suppliers which prepare offers completely and
in line with BAT requirement will be invited to participate in BAT
meetings to present their responses. Presentation should take no longer TBA
than 1 hour and 1 hour will be dedicated for BAT questions.

(7) RFI Evaluation – All returned and completed RFI documents to be

evaluated by the BAT Team; unsuccessful suppliers will be informed TBA

(8) Suppler Selection – Price negotiation will be made via BAT tendering
tool (complete utilisation manual and test phase will be send and done in
due time). Only selected suppliers will participate in the e-auction TBA
process.

(9) Contract Award (subject to BAT Board Level approval) - Contract

will be based on BAT’s contract template and further adjusted to the TBA
global BAT’s standards and negotiated supplier terms.

(10) Solution implemented (depending on the suppliers offer and

TBA
negotiations)

* Those are the dates that BAT intends to keep however the process can result
with the changes to the above timetable.

Accuracy of Documentation

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RFI – In Commercial Confidence

You should review this RFI document upon receipt; should any part of this RFI be
found to be missing or unclear you should immediately contact BAT at the above
mentioned contact address. No liability will be accepted by BAT for any omission
or errors in the documentation that could have been identified by you. Responses
without clear and full answers to all required parts can be rejected before ‘RFI
Presentations’ stage.

Any references in the Documentation to “the Supplier” are, for the purposes of
this invitation, references to any RFI respondent who may be awarded a contract.

Shortlist, Discussions on proposals and Notification of

decision
At the discretion of BAT a list of potential suppliers will be selected for further
detailed discussions and negotiations as detailed in 2.1, as a result of the
evaluation of the response to this RFI.

BAT may undertake further discussions, hold site visits and request presentations
from RFI Respondents as part of the supplier selection process. BAT will provide
as much notice as possible should these events need to take place.

BAT undertakes to notify all suppliers as promptly as possible following

completion of our evaluation.

Structure of your Proposal

Management Summary & Response Content

Please provide a summary of the response to RFI, including details of all
appendices and any additional pertinent literature. For guidance, this should be
limited to between one and two pages.

Detailed Response to RFI

Respondents should provide a detailed response to each of the following sections
listed in Section 3.2, ensuring that all points in the section are addressed and
explicitly reference the items by the section numbers assigned.

Company Background Information

Ref Requirement
1 1.1 Please confirm the name of your organisation and legal entity which
if your bid is successful, would contract with BAT for the provision of the
goods or services.

2 2.1 Provide the name of the person submitting this response with full
contact details as well as an alternative name and contact details that
can be used if the primary contact in is unavailable for some reason.
3 3.1 Please specify any quality certificates (i.e.: ISO certification) your
organisation in Romania possesses.

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RFI – In Commercial Confidence

Other Commercial Issues

Ref Requirement
1 1.1 Please list areas where your proposal does not meet the BAT
requirements (your open question answer is not fully in line with
BAT requirements or you answered no with ‘yes on no’ questions).
This should in particular include all major issues to the pricing
model, main contract requirements and other RFI elements.
2 Value added elements:
2.1 Please list areas where your proposal exceeds the minimum
requirements of BAT or present major value added elements which
can be brought into BAT business through cooperation with your
company
2.2 Please present you ideas for potential saving projects for BAT
including saving level to be expected and its source (i.e.: lead time
differentiation for particular drop off point, combined transports with
different clients, minimum order size change etc.)
3 3.1 Please present your overall contingency plan for BAT contract.
4 An integral part of the cooperation will be a KPI set, subject of
ongoing evaluation.
4.1 Please find enclosed the main KPIs being requested by BAT. They
will be a subject of ongoing evaluation and will impact the supplier
profitability on the contract. Please confirm you agree on the
presented KPIs and their levels and present you offer on level 1
discount & level 2 discounts to the invoice in case of
underperformance.

KPI v.3.doc

4.2 Please present your best practices within KPIs you would like to
apply on BAT contract
5 5.1 BAT’s requirement is that your offer must have a minimum
validity of 90 days from the date of submittal.

6 6.1 This is a free section for your short comments to any of the points
which you find important but not included in to any response
elements
3.2.2 Experience & Qualifications

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RFI – In Commercial Confidence

Ref Requirement
1 Client base and experience:
1.1 Please confirm your current clients within FMCG, and not limited to,
sector in Romania with which you cooperate on the similar scope of
services that BAT requires. Please add to each client the starting year
of the contract and its short description.
2 Experience and quality of personnel:
Please present a turnover rate in your Romanian organisation – if n/a
for European level (average length of employment for the operational
staff and separately for the management.

Implementation

Ref Requirement
1 Implementation:
1.1 Please provide a lead-time for service implementation you can
guarantee to BAT from the date of contract / letter of intent signing.
1.2 Please provide the top line methodology with timetable (in weeks)
of the implementation.

BAT RFI Checklist:

Prior to submitting your RFI response to BAT, please ensure you have
completed all the items listed below:

RFI Task Action

Confirm intention to respond Email BAT Contact listed in 1.5 by

date in Section 2.2

Returned Appendix A with RFI response Return to BAT together with the rest
of Response by date in Section 2.2

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RFI – In Commercial Confidence

Appendix A - Pricing Template

This section shall include a description of the costs and prices of the
proposed solution. All pricing information shall be limited solely to this
section of your proposal. Accordingly, you should follow all instructions
carefully and provide all data requested in the formats specified herein.
The prices mentioned in this table will represent the baseline
price from which the e-auction process will start. The e-auction
process will be a reverse auction in which bidders will start
bidding in a “top to bottom” process.

Pricing template for the provision of requested goods:

L:\My Documents\
Projects_Buy\2010\Direct Materials\2.Analisys\2.3Market Analisys\PALLETS\Appendix A PALLETS & LIDS.xls

All prices should be presented as net value.

Appendix B – Specification of Requirements

Introduction
The document attached below provides an overview of the services required. It is
a summary of the main activities required by BAT Romania.

L:\My Documents\
Projects_Buy\2010\Direct Materials\2.Analisys\2.3Market Analisys\Appendinx B.doc

Appendix C – Supplier evaluation criteria

This document includes the main aspects that BAT will survey in the Supplier Selection
process. All potential suppliers will be evaluated solely on these criteria.

L:\My Documents\
Projects_Buy\2010\Direct Materials\2.Analisys\2.3Market Analisys\Appendix C.xls

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RFI – In Commercial Confidence

Appendix D – Product Specifications

Bellow attached files represent the product Specification files which are to be the baseline for
price calculation. No product specification changes are to be made to products mentioned here
without prior consent of British American Tobacco.

L:\My Documents\ L:\My Documents\ L:\My Documents\ L:\My Documents\

Projects_Buy\2010\Direct Materials\Specifications\Pallets
Projects_Buy\2010\Direct Materials\Specifications\Pallets
Projects_Buy\2010\Direct
& Lids\Modified\Capac 1200x800x36
Materials\Specifications\Pallets
Projects_Buy\2010\Direct
& Lids\Modified\Capac
30007549.bmp 1200x800x36
Materials\Specification
& Lids\Modified\Cap
30007550.

L:\My Documents\ L:\My Documents\ L:\My Documents\

Projects_Buy\2010\Direct Materials\Specifications\Pallets
Projects_Buy\2010\Direct
& Lids\Modified\Palet
Materials\Specifications\Pallets
Projects_Buy\2010\Direct
1200x800x144 30015285.bm
& Lids\Modified\Palet
Materials\Specifications\Pallets
p 1200x1000x146

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