Nike 2003 Annual Report Download - page 6

International branch offices and subsidiaries of NIKE are located in Argentina, Australia, Austria, Belgium,
Brazil, Canada, Chile, Croatia, Czech Republic, Denmark, Finland, France, Germany, Hong Kong, Hungary,
Indonesia, India, Ireland, Israel, Italy, Japan, Korea, Malaysia, Mexico, New Zealand, The Netherlands, Norway,
Peoples Republic of China, The Philippines, Poland, Portugal, Singapore, Slovakia, Slovenia, South Africa,
Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom, and Vietnam.
Orders
Worldwide futures for NIKE brand athletic footwear and apparel, scheduled for delivery between June and
November 2003, were $4.9 billion compared to $4.6 billion for the same period last year. Based upon historical
data, we expect that approximately 95 percent of these orders will be filled in that time period, although the
orders may be cancelled.
Product Research and Development
We believe that our research and development efforts are a key factor in our past and future success.
Technical innovation in the design of footwear, apparel, and athletic equipment receive continued emphasis as
NIKE strives to produce products that reduce or eliminate injury, aid athletic performance and maximize
comfort.
In addition to NIKE’s own staff of specialists in the areas of biomechanics, exercise physiology,
engineering, industrial design and related fields, we also utilize research committees and advisory boards made
up of athletes, coaches, trainers, equipment managers, orthopedists, podiatrists and other experts who consult
with us and review designs, materials and concepts for product improvement. Employee athletes wear-test and
evaluate products during the design and development process.
Manufacturing
In fiscal 2003, approximately 1 percent of total NIKE brand apparel production for sale to the United States
market was manufactured in the United States by independent contract manufacturers, most of which are located
in the southern states. The remainder was manufactured by independent contractors located in 35 countries. Most
of this apparel production occurred in Bangladesh, Bulgaria, China, Hong Kong, India, Indonesia, Malaysia,
Mexico, Pakistan, The Philippines, Sri Lanka, Taiwan, Thailand, and Turkey. Substantially all of our apparel
production for sale to the international market was manufactured outside the U.S. Our largest single apparel
supplier accounted for approximately 7 percent of total fiscal 2003 apparel production.
Virtually all of our footwear is produced outside of the United States. In fiscal 2003, contract suppliers in
the following countries manufactured the following percentages of total NIKE brand footwear:
Country Percent
People’s Republic of China ................................................. 38
Indonesia ............................................................... 27
Vietnam ................................................................ 18
Thailand ............................................................... 16
Italy ................................................................... Lessthan1
Taiwan................................................................. Lessthan1
South Korea ............................................................. Lessthan1
We also have manufacturing agreements with independent factories in Argentina, Brazil, India, Mexico, South
Africa, and Zimbabwe, to manufacture footwear for sale primarily within those countries. Our largest single
footwear supplier accounted for approximately 7 percent of total fiscal 2003 footwear production.
The principal materials used in our footwear products are natural and synthetic rubber, plastic compounds,
foam cushioning materials, nylon, leather, canvas, and polyurethane films used to make AIR-SOLE cushioning
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