I-Bhd has entered into a supply chain alliance with leading Chinese manufacturers of home electrical appliances in a move to sharpen its competitive edge with the advent of the Asean Free Trade Area (Afta) next year.
Its chairman Datuk Lim Kim Hong said the move was part of the companys strategy to leverage on Chinas comparative cost advantages and improved product design and quality.
Our company stands to reap numerous benefits from this Afta plus China strategy as it will enable us to tap into the sourcing strengths of our Chinese counterparts for cheaper raw materials and take advantage of regional markets in Afta from the companys manufacturing base in Malaysia, Lim said in a statement yesterday.
He said the production process would be divided, with the Chinese companies manufacturing components and sub-assemblies with large labour content, and I-Bhd focusing on quality and higher-skilled portions.
From a marketing perspective, the strategic alliance with the Chinese companies would enable I-Bhd to enjoy a lower cost structure and widen its product range and designs, he added.
Together with our established I-brand, we will become a worthy challenger for the leadership position in the air-conditioner market in Malaysia, especially as we already have a significant market share, he said.
Lim said the retail price for consumer electronic products was expected to decline in real terms this year.
This drop in price augurs well for the industry as it is expected to create new demand for the products, and thus create a market segment that seeks quality and affordability, he said.