Harris Teeter 2003 Annual Report Download - page 10

SERVING CUSTOMERS GLOBALLY A&E has been focused on expanding its presence globally for several years
and has transformed into a truly global sewing thread company. This was evidenced in fiscal 2003 when sales generated
by our foreign operations accounted for over half of A&E’s total sales for the first time in our history. In summary,
foreign sales increased 10.5% over fiscal 2002 and accounted for approximately 52% of total A&E sales.
As we continue to grow internationally, we solidify our position as one of only two significant global sewing thread
providers. This status provides us access to manufacturers around the world and our concentration on technology
enables us to provide high-quality thread, meeting the strictest performance standards of our customers. In a very
fragmented industry, we believe that we are gaining market share in certain strategic markets and positioning ourselves
for future growth.
FURTHER EXPANSION IN 2003 During the second fiscal quarter, A&E formed a strategic joint venture with
Ningbo Veken Elite Group Co. Ltd. (“Veken”) to manufacture, distribute and sell sewing thread for industrial and
consumer markets within China and for export markets. Veken is a textile company, publicly traded on the Shanghai
Stock Exchange, whose products include home textiles, sewing thread, knitwear and garment fabric.
Veken, one of the largest thread companies in China with thread related sales of approximately $34 million in 2002,
contributed all of its sewing thread operations to the joint venture, which operates under the name Huamei Thread
Company Limited. A&E and Veken each own 50% of the joint venture.
As a further part of our expansion in Asia, we have increased our capacity in our new dyehouse in Dongguan City,
China, and installed state-of-the-art manufacturing equipment, capable of making highly engineered continuous
filament sewing thread products specifically for use in non-apparel markets. Non-apparel end-use markets represent a
significant opportunity to expand our global sales. Currently, approximately 70% of our sewing thread is sold to apparel
end-use customers, producing jeans, intimate apparel, underwear, childrenswear and outerwear. Non-apparel end-use
customers include producers of footwear, furniture, home furnishings and automotive interiors.
During the past year, we also opened sales and distribution facilities in Nicaragua, added a licensee in Indonesia, started
construction on a new dyehouse in Bangladesh, and acquired a majority interest in Bieze Stork, BV in the Netherlands.
GLOBAL APPROACH To satisfy our global customers who source products throughout the world, we must provide
the same high quality products, standards, and services that they expect. Everywhere A&E has entered a new market,
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AMERICAN & EFIRD
RUDDICK CORPORATION & SUBSIDIARIES ANNUAL REPORT TWO THOUSAND THREE
Total Sales
IN MILLIONS OF DOLLARS
Operating Profit
IN MILLIONS OF DOLLARS
99 00 01 02 99 00 011 021 031
03
361 106 255
121 238
132 194
137 158
152 141
FOREIGN—DOMESTIC
359
326 295 293 48.6 47.5 21.6 12.5 13.6
1 Includes exit and impairment
costs as follows:
'03 – $ 0.6
'02 – $ 7.8
'01 – $ 2.1