Logitech expands mouse manufacturing facility
Jan 07, 2005
Swiss Logitech, the world's leading computer parts supplier, plans to reinforce its global mouse manufacturing base in China by launching a new factory project that will entail an investment of about US$15-20 million.
Logitech Chief Executive Officer Guerrino De Luca said at a press conference yesterday that the new facility, which will be in operation in the middle of 2005, is expected to increase its total production capacity by 30 per cent.
Its current production facility at the Suzhou New Area, which was set up in 1994, now produces annually 70 million mice.
"We need efforts to enlarge our production capacity since we have a growing global market," he said.
He said that the target of Logitech is to grow its China business by a compound growth rate of 30 per cent in coming five years as the market expands.
Logitech set up the Suzhou Logitech Electronics Co Ltd in 1994 and it closed factories in Ireland and the United States. To date, it has supplied 500 million mice to the world market.
The company was presented by the Jiangsu provincial government yesterday with an award for the famous trademark of its product.
In addition to the retail business, its mice are sold to more than 20 big PC manufacturers in the world.
"We are pleased to have established partnership relationships in the Chinese market, which are favourable to our expansion," said Luca.
The products from Logitech Suzhou facility contributed to half of its global sales revenue of 11.5 billion yuan (US$1.4 billion) last year.
"We are looking into fast development in the next 10 years in Suzhou," said Logitech Chairman Daniel Borel.
The new factory will help Logitech reach its long-term goal of obtaining an annual global revenue of 25 billion yuan (US$3 billion) within five years, Borel said.
"China will surely share a considerable portion of it," he said.
China, one of the company's top 10 markets in the world at present, is expected to be upgraded into one of top five if the goal is realized, Luca said.
He said Logitech will invest 100 million yuan (US$12 million) in sales and marketing in China, "an important way to our objective."
Gavin Wu, vice-president of the Sales & Marketing, Asia Pacific Region, said 100 new special shops will be set up in more than 30 cities.
Logitech now has three large research and development centres, with one in Silicon Valley in the United States, one in Taiwan and one in Switzerland.
Its three small ones are in Toronto, Canada, Washington DC in the United States and Suzhou, Jiangsu Province respectively.
Borel said Logitech invested more than 450 million yuan (US$54 million), about 4 per cent of its annual revenue, into research and development of new products annually.
"The portion of the investment going to the centre in Suzhou will go up year by year," he said.