Electronics Giants Looking to Farm Out More Work
More molders could be the beneficiaries of the phenomenal growth spurt of Toronto-based Celestica Inc., as well as the decision of electronics OEMs to outsource more of their work, according to news r...
More molders could be the beneficiaries of the phenomenal growth spurt of Toronto-based Celestica Inc., as well as the decision of electronics OEMs to outsource more of their work, according to news reports.
Celestica, the world’s number three contract manufacturer of electronics hardware, was purchased by a group of investors from IBM for $550 million in 1996. Today the company’s market value is estimated at $9.75 billion. In that time, the company has grown from two factories to 29 plants, located in 11 countries. The company is projecting its 1999 sales of $5 billion to double by 2001.
Celestica and its suppliers are in effect reaping the profits of a double-whammy of good fortune: An explosion in demand for hardware that supports the Internet, and a boon in the electronics outsourcing business.
According to a recent report in the Financial Post, both trends are likely to not only continue, but grow. Nortel, for example, announced plans last year to close plants and rely more on contract manufacturing, a move it says will not only save money but allow it to get products to market faster. Celestica, according to the same report, is looking to invest as much as $1 billion in expansion and acquisition activity in the near future. All this bodes well for suppliers to the electronics market.