NOTE acquires production capacity in China
Sep 24, 2007
NOTE is starting a strategic collaboration with Ionics EMS of the Philippines.
In the first phase, NOTE will acquire 50% of Ionics EMS's facility in China.
"I'm delighted that we're starting a strategic collaboration with Ionics EMS now, one of Asia's leading EMS providers. This acquisition brings us cost-efficient production capacity in China and Asia. The facility is new (2005) and currently has trained, skilled staff on-site, and new machines. Our intention is to utilise the unit for existing and new customers. We already have customers in the Telecom and Industrial segments that need production in China and Asia. This initiative also means us consolidating our role as a long-term partner for our major customers," commented Arne Forslund, NOTE's CEO and President.
"In the current year, this will generate a marginal effect on sales and earnings but we will see a positive effect as early as during 2008 because we can relocate production to Asia. The new customers we expect to attract through this deal would be additional. The facility has annual production capacity equivalent to some SEK 500 m, and current capacity utilisation is less than SEK 100 m. The acquisition is fully consistent with our long-term strategy of starting production capacity in cost-efficient countries. We can now address customers with a focus on the growing Asian markets," concluded Mr. Forslund.
"With our ODM (original design manufacture) skills, this deal gives us a secure link to the European market, while we see huge opportunities in developing our business connections with NOTE," responded Lawrence C. Qua, CEO and Chairman of Ionics EMS.