Strategic Outlook

As a components manufacturer, it is vital that Phoenix Mecano builds its strategic activities on an extremely sound cost basis. Components do not differ significantly in terms of their design or their quality. For customers, price is the most important deciding factor. Following the course of the learning curve, prices for components are falling slightly in the long term.

Our tried and tested and yet forward-looking approach towards continuous improvement of our cost position, rests on three pillars:

• The constant expansion of our group- wide global sourcing programme
• The flexible relocation of our production facilities in order to optimise our production costs and logistics costs
• The concentration on volume

We currently have cost-effective production and assembly sites in Hungary, China, Singapore and Tunisia. Our global material procurement operations span the most diverse sources in India, south-east Asia and eastern Europe.

We are building up our - both today and in the future - on the basis of this favourable cost situation. In addition, we are continuously investigating opportunities in related business fields, exploiting the two man propulsion mechanisms of our growth, the outsourcing wave and the globalisation wave. The trend towards lean production methods and towards the concentration on the core business - which continues unabated at our customers - continually opens up new opportunities for us as components manufacturer.

With our global presence - which is particularly marked in comparison to our main competitors - we also have the opportunity to follow our customers wherever they open up promising growth markets.