S'pore electronic firms seek opportunities abroad
S'pore electronic firms seek opportunities abroad
SINGAPORE (DPA): Electronics manufacturers hit hard by
competition are planning to invest overseas, outsource or acquire
companies, a Singapore survey showed on Saturday, but electronic
commerce is not popularly viewed as a viable strategy.
Nanyang Polytechnic's International Business Resource Centre
queried 450 semiconductor, disk drive, personal computer,
supporting industry and contract manufacturers during its
research.
About seven in 10 of the respondents, mainly PC, disk drive
and contract manufacturers, said they intend to invest overseas
in the next 12 months mainly to lower their wages and gain access
to larger markets like China, India, Europe and the United
States.
The survey results, published in The Business Times, found
lower production costs and proximity to key customers were also
key reasons for going overseas.
Contract manufacturers are also heading to Hungary and Mexico,
the survey found.
About 60 percent of the electronics producers said their
profit margins were under pressure from severe price and industry
competition and rising wages and overheads.
Least interested in e-commerce are PC suppliers and sub-
contractors, who cited high costs and lack of skilled IT
personnel.
"Moreover, they have been using the fax and the telephone to
conduct their business and this has so far proved to be both
efficient and sufficient," researcher Sylvia Teh was quoted as
saying.
Outsourcing and automation were each cited by about 40 per
cent of the respondents as a strategic response, with
manufacturers looking to outsource lower-value activities mainly
to suppliers in Asia.
Major manufacturers such as NatSteel Electronics (NEL) have
gone into distribution in China by acquiring substantial shares
in partner-firms there.
NEL clinched a deal earlier this year to purchase a U.S.
manufacturing plant from Japanese giant NEC Corp. for 200 million
U.S. dollars to give it a firmer foothold in Japan as well as a
base for expansion in the United States.
In addition to the Oregon plant, NEL also has a facility in
California and a large plant in Mexico.
"By acquiring companies, you get the entire chain of
activities, and gain direct access to the business," Teh said.