- Letter from CEO
Greetings from Leona 2012
Hope my X’mas & New Year greetings can reach all our friends wherever you are.
I must speak particularly to a few friends first :
CM, hope this open greeting won’t make you uneasy, our very low-profile trustworthy old friend. I remember very well how I personally knocked on your door, in our most confusing time after the investment failure. With all your cool-headed advices & plans, we have survived the rough old days and turned around. Forgive me for I keep on forgetting those simple principles every year. I am really trying, at least to face them. I can learn better when we eat. So let’s meet more often at those cozy restaurants.
Frederic, we should have a lot to do together. You need good product & quality engineers for all your great ideas! Pls entrust them all into our hand. Nobody can work with your workflows better than us. Sometimes my people can know your projects better than your people do ! How can you still not seeing our strong sense of commitment?
Takashi, simply tell us how things can work out in your very spectacular market. We will give our full support ! And, pls don’t forget us when you can see the sun.
To all our beloved friends who care for us, here is a little summary on LHC in 2012 :Our production volume increased over 20% ! Under the fact that we actually could not increase our workforce (for typical “Chinese” & “Vietnamese” reasons), the amazing performance was solely achieved by our improved efficiency & our faith to ourselves! To me this is a miracle.
However, our margins went down. To keep the China pricing stability was not a small challenge. Keeping our China price lists unchanged = fetching every-day-lower-price for our internal cost structure. The inflationary environment in China was full faceted. And our Made-in-Vietnam could not meaningfully share our Made-in-China functions. Never to sacrifice on quality & service, we have ran out of further cheaper substitutes on our manufacturing materials & processes. Despite all the efforts, our cost per capita still obviously rose in 2012. We have officially entered a new era in our China cost structure. A hard truth which in the past 3 years we have endeavored to delay and to smoothen its impact on our customers. Now it finally comes. Of course this kind of impact will be under super strict scrutiny, 7/24, for you & for us.
(to let outsiders understand our China cost situation better, one may look at China's minimum wage policy. China government demand an annual average growth of China's minimum wage above 13%. Nobody was rocked by the aggressiveness this time, because since 2011, our actual paid labour wages were at least doubled the statutory minimal wages. We would love to pay the statutory minimal wages, if we could still keep our people in that price!)
The overall performance of our Vietnam operations was far from our target. It is already on the verge of my patience. So… we will give it a push! We will spend more time in this project in 2013.
The end result from any kind of political regime is actually the rule-by-minority. Let's pray for the leaders to be wise & benevolent.
Externally, we were drifting along the economic wave. Our clientele was rather biased to the European side in the recent years. The noises in Europe has caused us lots of cautions. Thanks to the smart play of our key European customers, they have sheltered us from storms & kept us working whole-heartedly on our own specialty! That is partnership & co-operation !
For those friends who, after all your painful shopping around & eventually realize that you can never find somebody like us, please don't be shy to come back to us! Our arms are open wide. Every saint has a past. Every sinner has a future. (…are my words getting too serious….?)
I like to poke my nose on new product development. Getting closer with engineers, I saw the lack of recognition & the easy scapegoating on engineers. Next time if you are pleased with the contribution of our engineers, I beg you to give them your big thumb. We all need a little pampering along our road. With your blessings, they can do miracles for you!
We did consider an acquisition in 2012, but we dropped out after initial book reviews.
Very likely there will be expansion on our Hong Kong operations in 2013.
We are not afraid of changes. We know we have everything we need. Our ambition & will power will determine our new heights. We believe in miracles because they can happen.
P.S. I promise myself some good hideaways & good food for 2013. How about you?