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Flextronics expands footprint in China

Source:April 19, 2012 | China Daily Release Date:2012-04-24 323
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By Wu Yiyao (chinadaily.com.cn)

SHANGHAI -- Singapore-based electronic manufacturing service company Flextronics International Ltd. is planning on expansion into the Chinese hinterland in accordance with the 12th five-year plan. 

The 200, 000-employee NASDAQ-listed company received 30 billion dollars in revenue in 2011 from services consisting of electronic design, fabrication, assembly, and testing. 

In China, Flextronics started operation 15 years ago in the Doumen area of Zhuhai, South China's Guangdong province. Starting from scratch, and expanding to a 53,000-employee industrial park with its own facilities including schools for employees' children, Flextronics has progressed alongside the local economy, said Valerie Kurniawan-Surjadi, Flextronics’ Senior Director of Corporate Marketing and Communications, Asia.

Besides the 15 design centers which have already been functioning along China's coast line, Flextronics is looking to cooperate with more local authorities in order to develop centers in China’s interior, said Mark Shandley, Vice President of Sourcing and Procurement for Flextronics.

China’s 12th Five-Year Plan envisages more manufacturing sites being built in the hinterland, and industries will also be upgraded in the area; so Flextronics would like to grasp the opportunity in a win-win situation, said Shandley.

Cooperation with suppliers in China’s interior will spur local economic development as well as the emergence of domestic needs; at the same time, Flextronics will draw itself closer to local markets and have a more insightful understanding of its clients' demands, said Shandley. 

All suppliers will be required to be compliant with the corporate social and environmental responsibilities of Flextronics, otherwise cooperation cannot be reached, according to Shandley. 

Flextronics will also offer use of its analysis systems to help suppliers make a reasonable pricing strategy because some suppliers have been focusing on lowering prices and then ending up with a deficit. 

The rising costs of various materials, and the dropping price of consumables. Together with risks of counterfeiting present a challenge to businesses in China, said Shandley. 

Flextronics engages more than 4,000 suppliers covering more than 200,000 components. All of the suppliers, in cooperation with Flextronics, are rated by a benchmarking system, measured according to on-time deliveries, order acknowledgement, supplier managed inventories, a continual replenishment program, terms of payment, quality performance and pricing competitiveness. 

In China, small-and-medium-sized enterprises have been experiencing a hard time over the past few years, and Shandley is sharing his insight into better opportunities for development. 

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