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DatoHeng

Year 2015 was a challenging but highly successful year for GTB’s Group of Companies, with positive contributions from the new product lines that we have successfully qualified and put into mass production in the end of Year 2014.

The operations team from our 3 major subsidiaries have done an outstanding job in managing their respective business units with utmost commitment, dedication and passion to deliver impressive performances which yielded the following results :

  1. Delighting our customers by proactively providing breakthrough solutions.
  2. Achieving aggressive productivity breakthrough and performance.
  3. Pursuing and implementing many lean manufacturing and process automation and simplifications.
  4. Coming up with very creative process and engineering innovation in delivering robust production results.
  5. Supported many new product development and samples design.

Our team was well aligned and aware of the challenges in the market place and responded with utmost agility by supporting one another with resources sharing and deployment that helped our cost structure stay intact throughout the year.

We started the year with solid growth in our sensors production for smart phone customers. The monthly volume was at near record levels for most part of 2015 except towards the last month of Year 2015, where we experienced a drop in both volume loading and forecasts for one of our major sensors line, this a likely result of excess inventory in the supply chain that requires to be depleted.

With a solid backing from our board of directors and a strong commitment from our customers, we continued to make strategic investments to manufacture new products and components that are incorporated into the latest technological product launches. In line with this, more than 6 new programs were carried out by our New Product Introduction (NPI) team and are now at various stages of qualification and customer design-in. New resources were put in to expand the NPI team who are tasked with coming out with products in the areas of IOT and smart devices. We are hopeful that at least 4 of these products in development will translate into new revenue contributors in Year 2016.

The group spent a total of RM 32 million CAPEX in equipment with advance capabilities and higher technology performance, with most of the CAPEX being allocated to support the production ramp of 3-4 new sensors to cater for our Swiss and Korean customers. We believe these sensors will help our customers to launch more feature-packed smartphones in their next generation models and barring any unforeseen changes and new product qualification delays, we are optimistic these sensors will go into mass production in Q2 2016.

To further tap on the very exciting potential of IOT, which is still in its infancy and with a potential of 20 billion devices expected to be connected by Year 2020, the group have set up a core team with a holistic plan and exciting strategy under the codename Globetronics 2.0. With a proper plan and execution, we expect growth from this new segment to be growing in double digits for the next 5 years.

All the new products in development hold the key to our growth this year as explained by the challenging situation of our existing businesses. The team is highly charged up to take on the challenges to bring these products to the market and be a proud component supplier of the upcoming “In” things to be launched in the near future and again bring Globetronics to new heights!!

KEY BUSINESS SEGMENTS PERFORMANCE

Our key product portfolio for Year 2015 consists of sensors, quartz timing devices, LED and IC which are in chorological order in terms of revenue contribution.

The sensors segment have become the biggest revenue contributor to the group in Year 2015, driven mainly by the full year contribution of a wearable sensor component that started mass production in December 2014. We currently have multiple products under co-development in this area which is targeted to go into mass production in 2H2016, with the closest products being imaging, motion and gesture sensors. The launch of the new products would be the key growth driver of the Group in 2016. The quartz timing devices business has been a stable base for us after the very healthy expansion over the past few years. As our customer seeks to gain more market share, we continue to drive lean manufacturing across all our product lines to deliver cost competitive solutions for them. On the operations front, our production team have achieved new breakthrough in productivity improvement, process simplification, cost control and automation. The LED segment continues to be very challenging with capacity and pricing concerns on very keen competition from manufacturers in China, Taiwan and Korea. General lighting products are seeing volatile loadings and ASP erosion across the board, although there is some bright spot in our smaller, niche customers who are increasing volume on their end to offset some of these challenges.

Despite the challenging environment, we continue to achieve new breakthroughs in manufacturing and operational excellence through our very committed and dedicated workforce. We continue to leverage up our machine utilization/improvement so that we were able to channel the CAPEX saved to support spot orders and normal demand increases. Among the key activities that contributed to our improved profit performance this year were : (1) keeping our inventory and material wastage at industrial benchmark levels (2) driving up yield across all product lines (3) optimal resource allocation through cross training and the automation of labor intensive operations. In view of labor costs forming a large component of our expense, we decided to invest Auto Optical Inspection (AOI) machines to automate a majority of our labor intensive processes.

Overall, our subsidiaries and their respective teams have done a great job to keep the organization lean and agile. Despite the challenging outlook, we are optimistic that our new sensor components will go into mass production and into the marketplace, forming a steady base for us to take on the challenges and opportunities for Year 2016.