Flextronics and Raymarine enter into five year outsourcing relationship
Aug 12, 2005
Flextronics (Nasdaq: FLEX) and Raymarine, one of the world's largest suppliers of marine electronic products to the leisure boating market, announced an agreement whereby Flextronics will provide vertically integrated manufacturing services to Raymarine.
The services, which will be provided initially through Flextronics' Hungary facility, will include printed circuit board assembly, box build, plastics, metals, printed circuit board, logistics, and test engineering services. The value of the agreement is estimated at approximately US$ 500 million over a five-year period. Flextronics will not assume any Raymarine buildings or assets, and no employees of Raymarine will be transferred to Flextronics.
Malcolm Miller, CEO of Raymarine, said, "We took this decision to ensure that we could not only maintain and grow our gross margins but access the latest technologies and skills in supply chain management. In working with our manufacturing partner, Flextronics, we expect to make significant improvements in our product realization process, new product introduction, materials management, quality and global logistics."
Miller added, "This move enables us to concentrate on our core competencies, which will be expanded over time, of engineering and product development, sales and marketing, and distribution. This puts us in a much better position for the future where product life cycles will shorten and customers will expect continual improvements to supply and service."
"Raymarine is an exciting company in a fast-paced market and we are thrilled that they have selected Flextronics to provide them with a full range of vertically integrated manufacturing services," said Mike McNamara, Chief Operating Officer of Flextronics. "We look forward to working with Raymarine and enabling them to utilize our end-to-end service offering at our Industrial Park in Hungary," he added.
This agreement is subject to certain post-closing conditions.