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Electronics Production | April 25, 2007

PartnerTech: “Final deliveries leads to a moderate start in 2007"

Sweden based EMS provider PartnerTech has announced its first quarter for 2007. Net sales rose by 7% to approximately €74 million (€69,7 million). The operating profit increased to €3.3 million (€3,5). The profit after tax was approximately €1,9 million (€2,3). The Industry/Telecom business unit reported 40% higher sales.
Activity in PartnerTech's markets is relatively brisk. Many changes are under way, including greater outsourcing by customers. One trend is that they are outsourcing production higher up in the value chain and asking for more integrated support, including auxiliary services such as product development, stock-keeping and distribution. For most contract manufacturers this means that they are increasingly affected by individual customers. More than one-third of the world's 50 largest contract manufacturers experienced volume fluctuations of greater than 20% from 2005 to 2006.

According to PartnerTech, the 50 largest contract manufacturers averaged sales growth of 18.4% in 2006. Excluding FoxConn, the sector leader with estimated 38% growth, the average was a more realistic 11.6%. PartnerTech's sales growth of more than 50% in 2006 was one of the strongest in the sector. According to Manufacturing Market Insider, PartnerTech rose from the 34th to 24th largest contract manufacturer in electronic manufacturing services (EMS). Thus, PartnerTech generated the second greatest percentage growth among the 50 largest EMS companies. The change from 2006 in PartnerTech's first quarter sales, reflecting major volume fluctuations between individual customers, was greatly affected by the fact that the big orders delivered to Tomra last year have not yet been replaced by equivalent new ones. The orders peaked in the second quarter of 2006, when a large percentage of the volumes for the German market were delivered. Those volumes will be lower in 2007 and 2008 and not fully replaced by others during the first half of this year.

Rapid, large-scale restructuring of the contract manufacturing sector, particularly when it comes to consumer related products, has left a wide-open business-tobusiness market – PartnerTech's area of concentration. PartnerTech is estimated to be Europe's second largest contract manufacturer in the business-to-business segment. As a less mature segment, it calls for greater proximity between technology, the market and production. The scale of production varies, while the products are often intended for a global market that has considerable logistical and distribution requirements.

Because the above characterization includes a large percentage of both the European and U.S. markets, PartnerTech continues to focus on international growth. PartnerTech already commands a strong position in the Swedish, Norwegian, Finnish and UK markets, as well as production facilities in Poland, China and the United States.

Click Here to download the full report (external link).

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