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Letter from Group CEO
We are fast approaching the end of what has been an extremely busy year throughout the group.
Fortunately, the strong economic growth worldwide in 2004 will be reflected in the Shriro group results this year. It is a credit to all our employees, customers and suppliers that we are able to report this.
We have been active all around the globe in 2004-from the restructuring of the Neil Pryde businesses in the US and Europe, to the acquisition of Imacon in the summer, to the merger of the Traxler professional photography business into Shriro HK, plus much more. All these activities are already producing improved results, proof enough that these were the right moves to make.
In this InForm newsletter-which looks to be a year-end "bumper" edition-we have a number of interesting articles on various group activities including a review of our Thailand operations, a new See's shop in Yokohama, a Shriro HK update and other great stories.
The coming year presents numerous opportunities and challenges, especially for a group of our diversity. We have to seize and overcome these, and at the same time seek out new directions and markets to service. It is a fact that each year business gets tougher, the competition keener and the markets more transparent. I don't expect 2005 will be any different.
That said, we look forward to 2005 with much optimism. The group's companies are embarking upon plans for the upcoming year that are sure to challenge us, but I am certain we will meet these challenges and achieve what we set out to accomplish. In order to reach our goals, we will need to review the basics of proper inventory and receivable control, and extract maximum efficiency from the Capital Employed in each entity for greater returns. We will be returning to this topic early in 2005.
So, enjoy the Festive Season and New Year celebrations. We look forward to seeing everyone refreshed and invigorated for what promises to be a year of great potential.
Seasons' Greetings to you all!
Michael R. Binns
Business Development
Newly Revitalized Camera Division Takes Aim at China Market
The floor-to-ceiling windows in Egon Heldner's office command some pretty serious views of Central and Victoria Harbour. Standing in front of them, Two ifc looms dead ahead, and the Tamar Site stretches out below. In-Form can't help but wonder if Heldner has tried out a Hasselblad H1 from up there-and based on some of the fabulous medium-format shots that hang around the Shriro offices, Central would probably come out looking pretty sharp.
Heldner's company is looking sharp, too. Now that he's the managing director of Shriro (HK) Ltd.-overseeing a range of high-end photographic equipment including classic Hasselblad and digital cameras, Linhof cameras, Broncolor lighting and Gitzo tripods-he and the company are, in his words, looking "to capture the potential of the emerging China market to the fullest possible extent."
Heldner explains, "China's middle class is growing fast, the country has a strong artistic scene, and the future market for social and commercial photography is immense. The 2008 Olympic Games in Beijing, an event that will provide a particular drive to our industry, are drawing closer.
"[Ultimately] we want to be the leading provider of high-end photographic equipment and solutions for advanced amateurs and professionals in China."
A new arsenal
The new Hasselblad digital product range made a splash at the recent photokina 2004 in Cologne, Germany, and initial sales have been recorded in all markets. While Heldner insists it will take some more time to achieve the expected revenues and profits from the Hasselblad digital product range, the other existing ranges of cameras and products continue to play a role.
Hasselblad, currently the medium-format leader, will remain the centerpiece of Shriro's activities. This bodes well for business in China, because the medium-format market there is healthy and still growing. "There are hundreds of existing Hasselblad V system users in China, who are now potential customers for our affordable V96C digital back, "Heldner says. "There is huge potential for affordable digital products in social photography. As soon as the commercial environment grows more sophisticated, our professional products will see an upsurge."
To this end Shriro will continue to target amateur and professional photographers through an appointed Hasselblad dealer network. But the company will also add direct sales to professional end-users and institutional customers. Heldner adds that the biggest change to their approach might be the new portfolio of professional brands offered by Shriro following the Group's acquisition of Heldner's former company, Traxler Limited, including Imacon's former ixpress digital back and Broncolor lighting as the core products "This activity will require the buildup of a skilled sales force that is able to support professional digital sales. We will also need to establish our own demo and service facilities in all major locations in China," Heldner says. Another important addition is the Gitzo line of tripods, again a leading brand with a strong position both in the enthusiast and professional segments.
The road ahead
To achieve their goal of conquering China, as well as succeeding in other Asian markets including Hong Kong, Japan, Taiwan, Singapore and Malaysia, there are going to be a few challenges along the way for Shriro.
Of course, competition will always be one. Manufacturers of medium-format cameras, digital SLR cameras and digital backs are likely to be the key players in the coming years, vying for space in what Heldner calls "a very fast-changing and competitive environment." He says to look out for further industry consolidation and cooperation. As for distribution, the picture is a bit clearer due to Shriro's ability to control the Hasselblad supply, which firmly ensconces the company in the upper echelons.
Another is the inherent challenge of doing business in China, where companies face a parade of issues such as high import charges and taxes, parallel importing, counterfeiting, and ultra-low-cost competition. Such issues, says Heldner, are sure to "keep us on our toes."
But Heldner is confident that Shriro is more than up to the task. With an experienced team of local experts joining in from both Shriro's and Traxler's side, and with the enviable range of photographic products resulting from the merger, the company is bound to succeed.
"With our Group's strong engagement in the photographic field, there are great opportunities to accelerate our growth and to improve our performance if we embrace the principles of regional and global cooperation, a strong learning culture, and the transfer of internal know-how," Heldner explains. "In almost any business that I can think of, these have become vital ingredients of success. I look forward to working with all my colleagues ¡K and I wish everyone a great festive season."
Egon Heldner, Managing Director, Shriro (HK) Ltd.
Egon Heldner joined the Group following its purchase of Heldner's former company, Traxler Limited, a supplier of high-end professional photographic equipment. The acquisition complements well Shriro's existing business of supplying and distributing Hasselblad medium-format cameras, and Heldner is charged with further consolidating and developing the combined portfolio.
He brings a vast, eclectic background of experience in marketing and distribution to his new position as Managing Director of Shriro (HK) Ltd. Heldner was born and educated in Switzerland, and speaks English, French and German fluently. His background is a bit unconventional for a person running a camera business: His graduate training is in advertising, and photography was a recreational activity for him before he acquired Traxler Limited two years ago. Under his stewardship Traxler enjoyed a good reputation, leading the Shriro Group to take notice.
Heldner has nearly 20 years of experience in distribution, mostly in Asia. After working in advertising and marketing in Europe, he joined the Hong Kong operations of a Swiss multinational in 1987, developing their luxury goods business in Europe and Japan. Four years later he joined the Swiss Diethelm Keller Group, a marketing conglomerate that provided Heldner with experience representing a wide range of consumer, pharmaceutical and technical brands across China and Asia. In 2003 he acquired Traxler, a move that ultimately led to his arrival with the Shriro Group.
Albert Yu heads for Siberia
Getting Into Gear
At Shriro, we pride ourselves on the versatility and energy of our people, which contributes directly to the company's continued success. Mr. Albert Yu, Managing Director of Shriro Machinery, recently showed both of these characteristics in spades as he challenged himself to a cross-country journey organized by Land Rover Owners Club (H.K.) Ltd. A total of 11 Land Rovers started off for Dalian, passed through Inner Mongolia and Siberia, and finished in Beijing a whopping 21 days later. Road conditions were very poor at times, so conquering the 7,000-kilometer journey required patience, resilience and resourcefulness on the part of every team member.
Putting their Land Rovers to the ultimate test was just part of the fun. Participants were also able to experience firsthand the cultures of the places they visited and the generosity and hospitality of the local people. We're sure Albert returned from the trip exhausted yet satisfied, and full of insights from a truly unique experience.
In-Form would like to take this opportunity to congratulate Albert Yu on his successful completion of the China-Mongolia-Russia cross-country drive.
Around Asia Pacific - 1
New Store in Yokohama for See's Famous Old Time Candies
A visit to the See's Candies store in Hong Kong's chic Landmark Building reveals why devoted customers keep coming back. In-Form watches as one suited gentleman strolls up to the counter and begins ordering chocolates through the glass display; speaking with an American accent-he's presumably from the West, where See's stores are prevalent-he mentions how he's there to buy a special surprise for his girlfriend. Standing nearby, Vivien Lee jokes, "Is this to make up for something?" The man replies, "No, flowers are for making up. These are for maintenance."
He obviously knows the best way to keep himself in his girlfriend's good graces. See's has a reputation for making some of the best chocolates money can buy, a fact that drove Vivien to start selling these premium candies in Hong Kong in 1976. Partnered with Shriro since 1999, she is managing director of VLee (HK) Co., Ltd., the sole and exclusive seller of See's in Asia.
In fact, Vivien has recently returned from the opening of the second See's store in Japan, this one in Yokohama (the first opened two years ago in the famous Omotosando area of Tokyo). The new shop is located in Motomachi, a well-known shopping street that has recently enjoyed a renaissance following redevelopment a couple of years ago. The cobblestone street is fashionable and old-fashioned at the same time-a perfect fit for See's.
Vivien says, "It's been a strange year, what with all the earthquakes and typhoons. Plus, it takes time to introduce a brand into a new market. But I'm very happy these two stores have taken off." There are plans for further expansion in Tokyo, as well as Shanghai.
So what is it that makes See's Candies a success in Asia? According to Vivien, it's probably the same things that have made the brand such a hit across the American West: The chocolates are flown in fresh from California and have no additives or preservatives-only the finest raw ingredients sourced from around the world. What's more, See's is different from its competitors because it is a chocolate specialty shop that uses whole pieces of nuts-not mince-and eschews molds and wax coatings. "It's like homemade," says Vivien. "You know what you're tasting." She adds that Asian tastes tend to lean more toward "chews"-nuts, nougats, caramels and the like.
If Vivien sounds like an aficionado, she should-this has been one long love affair with See's Candies ever since she discovered them in San Francisco (where the company was founded in 1921). A frequent traveler to Hong Kong from the East Coast of the US, she was required to fly through San Francisco, and it was on one of these stopovers that she first tried See's. The rest, as they say, is history.
Vivien does offer one tip for heightened enjoyment of her products. "I'd recommend putting your See's chocolates in the freezer-they last longer because they take longer to melt." Guys, take note.
Around Asia Pacific - 2
Hasselblad digital products launch in Singapore
Shriro Singapore recently unveiled the new Hasselblad digital cameras at SAFRA Mount Faber Clubhouse on November 4, 2004. The event, titled "Ready for More?" and hosted with the SAFRA Photo Club, was the first-ever event at the new Clubhouse, which had opened only three days earlier.
During the launch, Mr. David Grover, Field Application Specialist, introduced the new H1D camera, Ixpress V96C digital back, and Hasselblad Flextight H343. Apple, Adobe and Epson supported the demonstrations by helping showcase the seamless workflow with Hasselblad's new digital system. More than 80 professional photographers attended and were able to have a close-up, hands-on experience shooting models and product photography with the new digital products. Another counter allowed attendees hands-on introductions to the new HC Macro 4/120mm lens and the H System Lens Adapter.
On display were works by international photographers such as Philip Diserens, Hasse Nielsen, Anders Espersen, Gavin Hellier and Grover together with works by local architecture photographer Albert Lim and fashion photographer Allan Ng, showcasing the versatility of Hasselblad's new digital system in fashion, landscape, architecture and product photography.
Company Profile: Thailand
Shriro Taking a Greener Approach to Thailand
Shriro operations in Thailand used to revolve solely around medical equipment. Now, with the establishment of Shriro Equipment (Thailand) Ltd., the company is moving in a distinctly more leisurely direction: helping keep Thailand's 200 golf courses well manicured.
The progression was more natural than it sounds. Shriro Medical Ltd. (Thailand) managing director Roy Barrett had previously worked with Inchcape Thailand, where he was responsible for supplying turf maintenance equipment lines by Toro and Ransomes. Put that together with the success Shriro Equipment is currently enjoying in Mainland China and Hong Kong with its Jacobsen turf equipment and E-Z-GO golf carts, and it's easy to see that a new business was ready to take off in Thailand.
Shriro Equipment (Thailand) Ltd.-headed by Director and General Manager Yuvadee Thiengchanya, Service Manager Pravith Buathong, Sales Administration Manager Laksabordee Visessuwan and Product Manager Chaiyanant Thabkrathok-started operations on May 1, 2004, and shares its new location near Bangkok International Airport with Shriro Medical. Twelve of the Thailand operation's roughly 80 staff are dedicated to the new company. Barrett is excited about the new venture, saying, "Shriro Equipment has made a very strong start, exceeding our projections. The timing of our entry into the golf equipment business is good as the golf industry is beginning what appears to be quite a strong recovery. There are now a number of new courses under construction, and many of the established courses are being upgraded and are investing in new equipment.
"Not only is golf once again growing in popularity among the Thai population, but there are also many visitors to Thailand coming here to play golf, particularly from Japan and Korea," he adds.
Currently, 70 percent of the turf maintenance equipment business is with existing courses, although Barrett ultimately hopes to see a 50-50 ratio between existing and new courses. This could take some time, however, as new courses tend to require long negotiation periods. After all, planning and building an 18-hole championship course doesn't happen overnight.
Jacobsen equipment-which includes mowers, sprayers, aerators and more-is considered by many to be the best, and it is used at many of the world's most famous courses. However, it has not performed as well in Thailand over the years, a trend that almost instantly changed with Shriro Equipment at the helm: The company has sold more in its first six months than the previous distributor sold in four years. Barrett credits Shriro Equipment's high level of customer service, as well as its determined and experienced sales staff.
"We intend that Shriro Equipment be the leading supplier of turf care equipment to the golf industry, and we are building up a portfolio of complementary products so that we can offer our customers a complete range of equipment," Barrett says. "We will do all we can to establish Jacobsen as the market leader; we have already moved into the clear number two position."
Medical supply business still going strong
Barrett also has a positive outlook for Shriro Medical Ltd. (Thailand). In existence since May 2002, Shriro Medical-headed by Director and General Manager Piti Phikulsod, Marketing Manager Ukrit Pupitat and Administration Manager Udomporn Wongsuwan-is a "significant player" in its market segments, which include intensive and cardiac care equipment as well as operating theater products.
Two of the largest lines are ventilators from Viasys in California, a world leader in the manufacturing of neonatal, pressure and adult ventilators, and intra-aortic balloon pumps from New Jersey's Datascope. Both lines hold leading positions in their markets; in fact, in Thailand Datascope holds close to 100 percent of market share. Barrett attributes this to the fact that such balloon pumps, which were once considered a luxury, are now almost commonplace in hospitals. The introduction of Viasys ventilators, meanwhile, has led to a rise in the survival rates of premature babies. The recent launch of Viasys' adult ventilators is expected to increase Shriro Medical's already considerable market share in the coming year.
Shriro Medical's success can also be traced to its highly knowledgeable sales staff, who must forge solid relationships with customers-almost exclusively hospitals-in order to gain their trust and therefore drive sales. Barrett anticipates that the market will continue to grow since medical care in Thailand is very good and much more affordable than in places such as the US and Europe.
Homegrown Success
Barrett is excited about the prospects for the Thailand operations. He sees their growth coming organically through Shriro Medical and Shriro Equipment, by extending existing Shriro businesses into Thailand, and via acquisitions of established Thai businesses. Barrett is a Thailand veteran: He is entering his 35th year in the country and even carries a Thai passport to go along with his British documents. Little wonder, then, that the affinity he feels for the country should spill over into his aspirations for Shriro in Thailand.
"The Thailand operations are still a very new and small part of the Shriro group, and I would like to see us grow to become more significant," Barrett explains. "The next few years should be very exciting as we build the Shriro presence in Thailand, and I feel very fortunate to be part of the team."
GELEC Takes a Calculated Gamble in Macau
Following the successful launch of their UK office in 2003, GELEC (HK) Limited has seized upon the opportunities presented by the rapidly expanding casino business in Macau and opened an office there.
In light of the vast sums of investments being pumped into Macau by casino operators from across the globe, and to accommodate the upcoming East Asian Games in 2005, Macau is rapidly becoming a focus for developers and construction companies across the Pearl River Delta.
Along with the business that the casinos and Games will bring, many government facilities are being targeted for upgrades to accommodate the inevitable influx of visitors to the former Portuguese enclave. This in turn is driving further investment from Hong Kong and Mainland-based developers, who see Macau as a buoyant market that can offer them returns similar to what they have enjoyed from Hong Kong over the past two decades.
The construction opportunities in Macau seem as great as those available in Hong Kong in the mid- to late 1990s. A huge complex is due to be built on the reclaimed land between Coloane and Taipa ("Cotai") that will house several casinos, one of which will be a smaller version of the Venetian in Las Vegas-complete with canals. It will include an estimated 36,000 hotel rooms to be built over the next five to 10 years and a golf course that will initially provide nine holes but ultimately be expanded to 18.
A longtime employee of GELEC and previously GEC, Mr. Brian Cheong, has been appointed as manager of the GELEC office. Brian was born in Macau, but moved to Hong Kong after leaving school to work in the booming construction industry. It is fitting, then, that he has now returned home for precisely the same reason. Brian said, "The developments and investment in Macau will offer tremendous opportunities for GELEC, particularly in the coming two years. This is the right time for GELEC to be focusing upon the Macau developments. I am confident that this will be a successful venture for the company."
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