Vtech 2011 Annual Report Download - page 7

VTech Holdings Ltd Annual Report 2011 5
To cater for business growth, CMS has added a new
factory building to its Liaobu facilities in Dongguan. It will
start operations in the third quarter of the financial year
2012 and will increase our manufacturing capacity by
more than 40%.
Conclusion
I would like to express my thanks to our customers,
suppliers, investors and business partners for their
continued support. My gratitude also goes to our
employees and my fellow directors for their hard work and
dedication, which are the bedrock of VTech’s success.
VTech is benefitting from its position as a leader in TEL
products and ELPs, and its increasing presence in the
EMS market. Our strategy of continuous innovation in
product design, increasing market share, expanding
geographically and maintaining excellence in operations
is achieving results. We will seize every opportunity
to grow our revenue in the current financial year
while stepping up our effort to manage costs, thereby
enhancing return to our shareholders.
Allan WONG Chi Yun
Chairman
Hong Kong, 31 May 2011
The prospects for our CMS in Europe look promising.
We will continue to see sales increases across the board.
Solar power inverters, a category we entered last year,
are expected to see rapid growth in the financial year
2012. The revenue contribution from home appliances
will also be significant. With the proliferation of Unified
Communications, we expect further growth from
wireless headsets.
Asia Pacific and Other Regions
In Asia Pacific and Other Regions, our TEL products
are expected to build on the strong performance in
Australia and Japan. We are also expanding into other
Asian countries such as Korea, to which products will be
shipped in the middle of this calendar year. The strong
momentum in other regions is expected to continue, as
the businesses in the Latin America and the Middle East
is growing.
In ELPs, our main focus of attention will be China.
Development of new electronic learning and infant
care channels, together with the re-structuring of our
traditional toy channel, should increase our business in
this market. A stream of new standalone products and a
new generation of ELPs tailored for the China market will
be launched during the financial year 2012. Elsewhere, we
are planning for a good year-on-year growth for English
language products shipped into Asia Pacific, led by
Australia, as well as the Middle East.
For CMS, growth in these regions will be mainly
generated from Japan. We will see sales increase for
medical equipment, as our customer has started to gain
market share following a new product launch. Since the
beginning of the financial year 2012, the demand for
handheld radiation detectors has risen sharply. This is a
new product series being designed and produced by
CMS for a Japanese customer. The volume of LED light
bulbs will continue to increase, but price erosion will
limit growth.
Looking further ahead, the development of the Chinese
economy will create new growth opportunities for
CMS. Firstly, we have received increasing requests from
customers for direct delivery of products from our
factory in China, to meet their rising domestic sales.
We are now planning to set up a dedicated operation
to cater for this additional business. Secondly, many
domestic Chinese companies have already reached the
size and sophistication to outsource, giving rise to new
business opportunities.