VTech Benefits from Industry Consolidation in EMS Market

VTech Holdings Ltd announced that it continued to outperform the global electronic manufacturing services (EMS) market in the financial year 2009. As with other EMS providers generally, the company experienced a reduction in business from many existing customers in the second half as they scaled back orders across the board in the face of economic turmoil. However, the economic slump also brought more business from the existing customer base, as certain companies ceased to manufacture their own products, instead transferring their production to VTech in search of cost savings.

VTech said it also benefited from industry consolidation within the EMS market. Tight credit conditions have forced some smaller players to exit the market. The company said its strong balance sheet, economies of scale and tradition of socially responsible manufacturing has been able to gain market share overall as the industry consolidates.

Although the global EMS market is forecast to contract in the calendar year 2009, the group expects that its CMS business will continue to outperform the global EMS market. VTech said its position in the professional audio segment will continue to increase following the establishment of a new audio laboratory at its R&D Center in Shenzhen. Staffed by specially trained engineers, the facility enables customers to design, test and fine-tune products on site. The company also expects considerable momentum from solid-state lighting, where the market is growing and the group’s existing customers are expanding their presence.

"It has been a year of unprecedented volatility in both the financial and consumer markets. As a company with market leadership, excellent R&D, efficient operations and a strong balance sheet, VTech is very well placed not merely to ride out the global economic downturn, but to grow even stronger as global economy eventually recovers,” said Allan Wong, Chairman and Group CEO of VTech Holdings Limited.

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