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| Subject: SCI--Systems Now Sanmina Corp outsource ERG alliance. | |
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Date Posted: 22:45:20 11/08/02 Fri http://it.asia1.com.sg/newsdaily/news010_20011008.html ------------------------------------------------------------ Renewed interest in contract manufacturers Some analysts predict that EMS companies will be the first to return to profitability once the tech recovery starts By Paul Chan , Business Times8 Oct 2001 ------------------------------------------------------------ A FEW big corporate deals concluded recently by contract manufacturers - or EMS (electronic manufacturing services) companies - have rekindled interest in this beaten-down sector. Some analysts now believe these high-growth EMS companies could be big winners despite a tech industry slowdown. ------------------------------------------------------------ The sector is down about 60 per cent so far this year. However, the major stocks in the sector have recovered sharply from their post-Sept 11 lows and have outperformed the major market indices. There's now a consolidation taking place: ------------------------------------------------------------ Singapore-headquartered Flextronics International said it would pay US$220 million to acquire the office manufacturing facilities of Xerox Corp. The deal is expected to add US$1 billion to Flextronics' sales. ------------------------------------------------------------ Canada-based C-Mac Industries said it will take over major manufacturing operations from beleaguered network operator, Nortel Networks Corp. C-Mac said it will acquire two plants from Nortel for an undisclosed sum. ------------------------------------------------------------ C-Mac is currently concluding a merger with EMS giant, Solectron Corp. ------------------------------------------------------------ San Jose, California-based Sanmina Corp announced in July that it is merging with Huntsville, Alabama-based SCI Systems Inc to create a giant EMS company with a US$14 billion turnover. Some analysts predict that EMS companies will be the first to return to profitability once the tech recovery starts. 'EMS companies are in fact accelerating the amount of business they can outsource,' Gary Baker, an analyst at US-based stock-brokerage Raymond Brown, told Reuters. ------------------------------------------------------------ 'I think the market is realising that these companies can grow even in this weak environment.' He added that there have been up to seven significant outsourcing deals in the last four to five weeks. ------------------------------------------------------------ EMS companies first appeared in the mid-1970s. They came into their own during the last decade. They proved they could not only be cost-effective outsource suppliers to large electronics players, but that they could also handle sophisticated operations, product design and distribution. ------------------------------------------------------------ Many outsourcing partnerships worked superbly as large electronics giants such as Dell, Compaq, IBM, Cisco Systems and Microsoft re-directed resources to develop better products and build their own brand equity. ------------------------------------------------------------ According to International Data Corp, the global EMS market is set to reach US$230 billion by 2005, from US$103 billion last year, growing at 25 per cent a year between now and then. Solectron Corp led the pack with a 21 per cent market share of worldwide EMS revenues in Q2 2001, followed by Flextronics' 12 per cent, and Canada-based Celestica's 10 per cent. Some analysts think that Flextronics' Xerox deal will propel the company into the lead by this year-end. ------------------------------------------------------------ In the near-term, analysts are more conservative about the sector's outlook. Reuters reported in early September that investment bank Goldman Sachs had reduced its earnings estimates for nine EMS companies by an average of 22 per cent. Goldman expects industry earnings growth to be only 3 per cent this year. On Sept 26, brokerage firm Merrill Lynch cut its 2001 earnings estimates for the EMS sector by 6-30 per cent. ------------------------------------------------------------ However, there is reassuring news. Last week, Flextronics told analysts that it was reaffirming an earlier earnings projection for Q2 2001. Flextronics expects to report EPS (earnings per share) of 15 to 18 US cents in Q2, which could be 44-73 per cent higher than Q2 2000. Revenues in Q2 are expected to rise 3-4 per cent to US$3.2 billion. Most analysts either maintained or upgraded their recommendations following the announcement. Of the 26 analysts who cover Flextronics, 15 are recommending a buy. ------------------------------------------------------------ http://www.hoovers.com/co/capsule/6/0,2163,16106,00.html ------------------------------------------------------------ Premium Features Indicated By Learn More 2700 North 1st St. San Jose, CA 95134 (Map) Phone: 408-964-3500 Fax: 408-964-3636 ------------------------------------------------------------ http://www.sanmina.com ------------------------------------------------------------Subsidiary Locations Corporate Hierarchy Manufacturing Branches Sanmina-SCI's services help electronics makers keep their sanity. The company (formerly Sanmina) is a contract manufacturer of printed circuit boards, backplanes, cables, and other electronics components. Equipment manufacturers incorporate Sanmina-SCI's products into communications devices (about 45% of sales), industrial and medical instrumentation, PCs, and high-speed computers. More than 75% of Sanmina-SCI's sales are in the US. The company's $4.5 billion acquisition of larger rival SCI Systems has vaulted it into the top ranks of contract manufacturers, behind market leader Solectron and alongside contenders Flextronics and Celestica. ------------------------------------------------------------ Subsidiaries/Affiliates Covered By Hoover's Online Viking Components, Inc. (Don't forget Viking Australia div yield really good--Brisbane--lease docks) ------------------------------------------------------------ http://www.dialinfolink.com.au/articles/1e/0c01001e.asp ------------------------------------------------------------ Sanmina-SCI opens $2m factory in Homebush ------------------------------------------------------------ GLOBAL electronic manufacturer Sanmina-SCI Thursday opened a new electronics manufacturing plant in Homebush Bay, investing over $2m and employing 80 staff. ------------------------------------------------------------ The plant's first customer is IBM, with production of IBM's NetVista desktop computers for customers in Australia & New Zealand. The facility will play a key role in the local technology industry and is expected to create up to 450 jobs over the next five years. ------------------------------------------------------------ "Sanmina's investment will build on NSW's Information and Communication Technology (ICT) industry, which employs more than 100,000 people and generates more than $26bn annually," Michael Egan, NSW Treasurer and Minister for State Development said. ------------------------------------------------------------ "NSW is home to 175 of Australia's top 250 ICT companies and today's opening boosts Sydney's role as the ICT hub for the region." ------------------------------------------------------------ "We now have the resources in place to offer our services to a wide range of companies looking to bring the production of their technology closer to their customers," Paul Appleby, Vice President of Sanmina-SCI said. ------------------------------------------------------------ "We have the logistics and assembly capabilities to manufacture technology products for markets as diverse as manufacturing, telecommunications, defence, medical equipment and the smart card industry." ------------------------------------------------------------ The plant is located adjacent to freighting company UPS, which enables IBM to ship PCs to its New Zealand and Australian customers as soon as the machines roll off the production lines. ------------------------------------------------------------ Philip Bullock, CEO and Managing Director of IBM Australia & New Zealand said the production of IBM NetVista desktop computers at the facility means IBM has greater flexibility to meet the needs of its customers throughout the region. ------------------------------------------------------------ "This new manufacturing facility will help us improve our speed to market," Bullock said. ------------------------------------------------------------ "Ultimately, that means better service for our customers and business partners in Australia & New Zealand." ------------------------------------------------------------ 16 August 2002 ------------------------------------------------------------ By outsourcing the work ERG has to Samina---the entity---cuts down on it's amortisation and depreciation charges. ----------------------------------------------------------- http://www.erggroup.com/news/mediarel/mediadisplay.cfm?MediaRelease=118 ------------------------------------------------------------ Date Of Media Release 13/09/2000 Title SCI Systems and ERG Group Announce Telecommunications Manufacturing Alliance Contact Melissa Frost Phone +61 8 9273 1879 Fax +61 8 9273 1208 Email mfrost@erggroup.com Division ERG Telecommunications ------------------------------------------------------------ SCI Systems and ERG Group Announce Telecommunications Manufacturing Alliance ------------------------------------------------------------ ERG Group and SCI Systems, Inc of Huntsville, Alabama today announced a global telecommunications manufacturing services alliance. To initiate the alliance SCI will acquire ERG’s telecommunications manufacturing businesses in Perth, Western Australia and Belgium. ------------------------------------------------------------ This purchase will take effect from October 2000 when in excess of 200 of ERG’s manufacturing staff will transfer to SCI. ------------------------------------------------------------ This transaction represents another major global alliance for ERG and provides a significant opportunity for SCI to benefit from continued growth of telecommunications, wireless and RF outsourcing. It will also contribute to SCI’s strategic objectives to globalise its expertise in the broadband mobile communications infrastructure market. ERG gains access to SCI’s global distributed manufacturing capacity and engineering expertise which operates in 39 locations across 17 countries. ------------------------------------------------------------ SCI will assume ERG’s contract to manufacture Nokia Networks GSM base stations at the Perth facility, as well as assuming the manufacturing contract between ERG’s telecommunications and transit businesses. ------------------------------------------------------------ SCI’s Chief Executive Officer, Mr Gene Sapp, said, “We are pleased to establish this relationship with ERG. The alliance represents our commitment toward expanding our manufacturing capabilities in the telecommunications, wireless and RF markets. The addition of these two new locations further expands our global manufacturing footprint.” ------------------------------------------------------------ ERG’s Chief Executive Officer, Mr Peter Fogarty, said, “The relationship with SCI provides ERG with another major global alliance. SCI’s acquisition will considerably strengthen ERG’s ability to meet worldwide demand and allow ERG to focus on its core business. ------------------------------------------------------------ “ERG’s clear strategy has been to maximise its capability of exploiting its leading edge technology in the rapidly expanding smart card industry. The sale of the telecommunications manufacturing business positions ERG to continue its rapid growth.” ------------------------------------------------------------ -END- ------------------------------------------------------------ SCI Systems, Inc ------------------------------------------------------------ SCI Systems, Inc is a world-class provider of manufacturing and supply chain services with worldwide revenue approximating $US8.5 billion. SCI delivers supply chain solutions through its global reach, dedication to quality, efficiency, and total commitment to customer service. The Company continues to pioneer new and innovative end-to-end services through its commitment to being the leading e-enabled EMS services provider. “SCI – The e-EMS CompanyTM is dedicated to providing manufacturing and related services for the new millennium. SCI is publicly traded on the New York Stock Exchange under the symbol “SCI”. The Company, headquartered in Huntsville, Alabama, operates 39 facilities located in 17 countries. SCI employs more than 32,000 people. ------------------------------------------------------------ Certain statements contained in this release may contain forward-looking information with respect to plans, projections or future performance of the Company. By their nature, forward-looking statements involve certain risks and uncertainties including, but not limed to, product and market acceptance risks, the impact of competitive pricing, product development, commercialisation and technological difficulties and other risks details in the Company’s filings with the Securities and Exchange Commission. ------------------------------------------------------------ Source: SCI Systems, Inc. (NYSE: SCI – news), Contact: Jim Moylan, Chief Financial Officer, SCI Systems, Inc, Phone + 1 (256) 882 4116, Email Jim Moylan. ------------------------------------------------------------ For more information about SCI Systems, Inc please visit: ------------------------------------------------------------ http://www.sci.com ------------------------------------------------------------ ERG Group ------------------------------------------------------------ ERG Group is a world leader in the development and supply of technologically advanced smart card systems and services and automated fare collection products and systems. The Group provides turnkey solutions to customers, from design and manufacture to supply, installation, commissioning and ongoing service and maintenance. ERG operates globally and has 17 offices in 12 countries. Listed on the Australian Stock Exchange, ERG ranks in the S&P-ASX Top 50 index. ------------------------------------------------------------ Contact: Melissa Frost, General Manager Investor Relations, ERG Group, Phone +61 8 9273 1879, Email Melissa Frost ------------------------------------------------------------ For more information about ERG please visit: http://www.erggroup.com ------------------------------------------------------------ [ Next Thread | Previous Thread | Next Message | Previous Message ] |
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| Re: SCI--Systems Now Sanmina Corp located Homebush | anonymous | 10:19:50 11/09/02 Sat |
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