China perspective
In May, Spectris co-hosted, together with two other UK-listed companies Kidde and IMI, an investor visit to China. The visit was organised by Bridgewell Securities, an institutional stockbroking business, for UK investors to learn at first hand more about this rapidly growing economy.
Investment managers from a number of institutional investors visited the hosts' sites in China and also met senior representatives from the Chinese financial community. The Spectris visit was to HBM's Suzhou site, where investors learnt about Spectris' presence in China, the market, how the company does business in China and the opportunities ahead. They also took a tour around the factory, where strain gauges and load cells are produced for the weighing industry, including for the increasing number of scale manufacturing customers in China. The factory has recently moved to larger premises to cater for the increase in demand for its products.
In the afternoon, management teams from BTG, PANalytical and Brüel & Kjær Sound & Vibration, some of the other Spectris companies represented in China, also gave presentations to the investors. Don Ramble, President of Spectris Asia Pacific, who accompanied the investors on their visit to Suzhou, commented:
"Most of the visitors were in China for the first time and were genuinely amazed by the image of dynamism and opportunity that Shanghai and Suzhou presented.”
“We are not strangers to China and have a great story to tell in this market. We have been operating directly in China for many years and today have 15 of our companies here, with representative offices in Shenyang, Beijing, Shanghai and Guangzhou. We are also currently in the process of setting up in Chengdu. This network, together with the operations in Hong Kong and Suzhou, gives us a very strong competitive position. Another important factor is that we have a first class staff in China with some of our employees having been with us for nearly 20 years."
Accounting for over 6% of total sales in 2003, China is an increasingly important market for Spectris and the company has established offices in a number of regions providing direct sales, service and applications engineering support. Over 170 people are employed throughout China, of whom more than 100 are in direct customer-facing functions, in addition to around 600 people employed at HBM's manufacturing facility in Suzhou.
The Spectris strategy to place greater emphasis on customer-facing staff has brought rewards as customers' migrate their manufacturing to lower cost countries such as China. This shift from local to global has led to new production facilities being established in the region, both by domestic companies seeking to acquire and maintain a competitive advantage for design and production, as well as western companies seeking to replicate their existing systems in new facilities in the region. Spectris customers now comprise many of the leading companies in China, and the continued migration of manufacturing and development to the region, together with expansion of domestic production, will provide further opportunities for Spectris to make good progress in China.