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Headquarters:
31 Ubi Road 1,
Aztech Building,
Singapore 408694,
Tel: (65) 6594-2288
Fax: (65) 6749-1198

Operations Review

Aztech Electronics

Aztech Electronics business comprises the design and manufacture of electronics, communications equipment and LED lighting products. With its vertically integrated manufacturing plant in Dong Guan, China, together with 7 worldwide sales offices and 4 R&D centres, Aztech provides services of ODM /OEM , Contract Manufacturing and Retail brand distribution.





With 25 years of experience in the electronics business, Aztech has built a strong reputation for its OEM /ODM , Retail Distribution and Contract Manufacturing business in the broadband, home networking and LED lighting products.

 

 

In FY2009, the electronics sector continued to be the main revenue contributor to the Group’s revenue with S$180.10 million (representing 64.3% of Group Revenue). Grounded with strong operating fundamentals, we were able to mitigate the impact of the adverse operating environment and remained profitable.

We were able to sustain our performance largely because of our team of competent and committed staff and the set of measures that were implemented.

Focusing on Profitable Markets

OEM/ODM
Aztech continued to work closely with telecommunications companies and Internet Service Providers (ISP) on the manufacturing of ADSL modems. Particularly, in Singapore, we supplied to the largest telco, SingTel, our 4-port ADSL modem (Aztech DSL1000ER) for their very successful mio TV package that allows home users to watch video via Internet Protocol Television (IPTV).

Contract Manufacturing
Contract manufacturing is a key part of our electronics business. When securing manufacturing contracts for Aztech ADSL, 3G to Wireless Routers and HomePlugs, we looked to find products that require higher value-added manufacturing and tap on our state-of-the-art manufacturing facilities, as this enabled us to yield a better profit margin. Sustaining our existing working relationship with Etisalat (UAE), SingTel (Singapore), Globe Telecom (Philippines) and TTNet (Turkey) was also our top priority.

Aztech Brand Products
Aztech products reach more than 30 countries worldwide, with Europe, USA and Asia Pacific constituting the largest markets. In the year, to counter the depressed prices for electronic products in the recession-struck countries, we focused our efforts on selling Aztech brand products through our distributors in markets such as Singapore, Malaysia, Hong Kong, Thailand, Vietnam, Pakistan, Sri Lanka, Saudi Arabia, UAE, Turkey, Israel and Latin America. This strategic move enabled us to leverage on the growth of these markets to broaden our customer base as well as provide us with better profit margin.

Complementing this strategic move, the marketing efforts in these countries were intensified to create greater brand awareness. One example of the marketing activities was the sponsorship of events targeted at tertiary students, who are potential customers deciding on the purchase of home networking and broadband devices.

Notably, our HomePlugs which allow users to transfer data via powerline and our 3G Wireless routers were very popular as more users seek to create and share their own WiFi hotspot when they are outdoors.

 

 

Product Accolades
In the year, our simplified Aztech HW550-3G Wireless-N Mobile Broadband Router received many awards and good reviews with its user-friendliness and compatibility with 3G/3.5G USB modems in the market. Some comments and accolades included:

“3G sharing… It’s a great concept. Do get one if you can.” - PC.com Recommended Award

“The Aztech HW550-3G is simply a fantastic device; it will be tough to find something as flexible and as powerful” – MAX IT Magazine Max Value Award

“We love the Aztech HW550-3G wireless router for its ability to support mobile HSPA modem.” – CHIP Magazine Recommended Award

“Aztech came in at the right time with a proper 3G USB broadband router that everyone has been eyeing for.” - OC Workbench Best Value Award

Other products launched in the year include:

  • Aztech HL110E: World’s First Eco-friendly 200Mbps HomePlug AV Ethernet Adaptor
  • Aztech HL106E – World’s Smallest 85Mbps HomePlug Turbo Ethernet Adaptor

LED Lighting
Towards the end of the year, we ventured into the design and manufacture of energy-saving, long-lasting and eco-friendly LED lighting products. The move for Aztech’s new subsidiary, AZ E-lite Pte Ltd to design and manufacture LED lighting equipment – named Aztech LED Luminaries– is driven largely by the bright potential LED lighting has on both the business and natural environments. According to market research, LED light presents a lead market advantage in the next 5 years as it replaces incandescent lighting progressively by 2016. As part of our R&D efforts, we have invested in a Light Spectrum Analyser to analyse the amount of light from light source, as well as analyse colour rendering and power requirement of the light fitting.

Meeting our Customers’ Needs

Although ADSL products continue to be Aztech’s best-selling product for OEM/ODM and many telcos and ISPs continue to use Aztech’s design, we sought to stay ahead of the market demands through our Research and Development (R&D) efforts. Riding on the increasing adoption rate of Next Generation Network (NGN) in many countries, the Group embarked on fibre optic modem development in collaboration with Agency for Science, Technology And Research (A*STAR). The research collaboration seeks to develop a 2.5Gbps Gigabit Passive Optical Network (GPON) system for the Next Generation Fibre-To-The- Home (FTTH) Network, which will greatly enhance our core capabilities in broadband and home networking products.

 

 

Other ongoing research efforts include the design of cost competitive products for broadband communication and home networking devices and the incorporation of GREEN feature into our products. We have successfully increased the communication speed of our home networking devices to 1Gbps. We have also explored the use of power efficient electronic component and eco-friendly material, as well as the reduction of power consumption when the product is not in use.

Improving on Current Processes

With the objective of increasing productivity and improving quality, Aztech installed robotic arms at the plastic injection facility in Dong Guan, China. This effectively enabled the automatic removal of parts from the machine at a set parameter, giving consistent output as compared to manual removal by operator.

In line with Aztech Green Movement, we have installed a heat exchange system to provide hot water for the dormitories instead of burning diesel for water heating. This is both cost effective and environmentally friendly.

Streamlining Operating Costs

As part of the effort to counter the slowdown in economy, we kept the manpower lean and stayed very focus on our objectives. For instance,
R&D activities were streamlined in our R&D centres in Singapore and China to ensure the teams are focused in their respective core competency and no duplication of work is carried out. The R&D has also been mandated to give priority and invest the resources on design and/or development tasks where the sales interest from prospective customers was high and for secured orders. These moves are targeted to improve R&D’s efficiency and input in the long run.

Manpower

In addition, we strived to keep the staff turnover low so that corresponding training costs could be kept to a minimal. To address the issue, we worked to improve the factory workers’ welfare by organising monthly birthday parties, providing more recreational activities and installing a hot water system in their dormitories.

Moving Forward

Although the economy looks to be on the recovery path, we will continue our strategic efforts in the various areas. In addition, we actively seek to bring about greater product breakthroughs and innovations to power growth.

 


Az Marine / Az United

Az Marine, a wholly owned subsidiary of Aztech Group, was incorporated to develop and manage the business of Marine Logistics. Its primary charter is chartering of vessels, such as tugboats and barges, and other marine-related services.

Az United’s business is in the procurement and supply of materials for the building construction industry and infrastructure development projects.



As part of the Groupís diversification strategy, Az United Pte Ltd and Az Marine Pte Ltd were set up in 2008 to target the materials supply and marine logistics business respectively. Having been in operation for one full financial year, both subsidiaries have made significant progress, contributing a total of S $99.66 million to the Groupís revenue and S$7.10 million to the Groupís profit.


 

In comparison to FY2008, Az United and Az Marine increased their contribution to the Group’s turnover from 8.5% to 35.6% in FY2009.
This proved that the diversification strategy has paid off.

Az Marine

Az Marine was set-up as a marine logistics business unit of the Group, with its mandate being ship owning, offshore vessel chartering, towing
and transportation, ship chandling, agency services and vessel brokerage. Az Marine has since expanded to encompass full marine logistic services and is now well-positioned to scout for additional business outside of the Group. Being a new marine division, efforts have been put in to develop and implement a good operations system and policy. The team is tasked to ensure the systems are continuously updated and that the vessels are well maintained to achieve functional and operation efficiency as a whole.

In the year, Az Marine continued to be the logistics arm for Az United in the supply of construction materials. In addition, we also chartered out some of our tugs and barges for transportation of cargo around Southeast Asia and provided harbour tug services for some of our local clients.

Az Marine currently owns and operates 11 tugs ranging from 2200BHP to 3600BHP and 10 barges between 300ft to 365ft. We have in our fleet a 150T crane barge that can support a wide range of salvage, repair and hoisting operations. We also have our own launcher to facilitate our operations within Singapore anchorages.

 

 

Reacting to the economy slowdown in FY2009, we took this opportunity to work on our annual maintenance programmes to ensure operational readiness when the market recovers. In addition, we altered our operational strategy by diversifying our service portfolio beyond ship owning to include ship management, crew management, vessel agency, ship chandling and ship brokerage services.

Az Marine’s vertical integrated system allows us to provide our customers a one-stop centre to manage their vessels. Our ship management
services range from crewing, technical management, HSSEQ to new building management. We also innovate the sales and purchase process, which includes having a structured financing or leasing.

Going forward, Az Marine will continue to enhance and expand our current logistics services and recruit additional manpower to strengthen our administration and crew management so as to optimise fleet operations. Az Marine plans to achieve the International Safety Management (ISM) Code Certification in 2010 to further enhance its service quality and
safety management.

Az Marine will also look at venturing into new areas such as the oil and gas industry, leveraging on Singapore’s status as a global transshipment port. It is with this dynamic spirit that powers the young division for future growth.

Az United

Az United’s business is in the procurement and supply of materials for the building construction industry and infrastructure development projects. We have successfully registered as a L6 Graded contractor with the Singapore’s Building & Construction Authority (BCA) under the basic building materials category. This carries a stamp of approval to bid and tender for projects with unlimited tender limit.

With this success, we will strive for greater heights. Az United is continuing to explore opportunities outside of Singapore and expand its service portfolio. With a united mindset, we see no boundaries.