1 Sept 2002
Staying Ahead Of The Curve(HKTDC Electronics, Vol 05,2002)
Vol 5, 2002
Staying Ahead Of The Curve
Shell Electric Mfg (Holdings) Co Ltd
A manufacturer of consumer electrical and electronic products, Shell Electric Mfg (Holdings) Co Ltd makes a leap into the hi-tech world of electronic manufacturing systems in the optics sector.
SHELL Electric Mfg (Holdings) Co Ltd is celebrating half a century of operations during which it has transformed itself from a manufacturer of consumer electrical and electronic products into an emerging player in the hi-tech sector. The group's operations have been marked by continual innovation and expansion into a worldwide network of offices and factories.
"We are confident that we can continue to spearhead the move into hi-tech products by scaling the technology ladder. Here, our strengths will be research and development and our own intellectual property, whereby we will continue to beat rising costs in Hong Kong and keep ahead of competitors as well," says group managing director Billy Yung.
"In the next 50 years, we will establish ourselves as a hi-tech player," he adds.
Shell has already begun its shift from an original equipment manufacturer and brand-name producer of consumer electronics by moving into electronic manufacturing systems (EMS) in the optics sector.
The company now manufactures laser scanner heads for laser printers, "becoming the only company in greater China to make these products". Shell also engages in EMS assembly work for DVD lens makers.
It has set up an enterprise in Shenzhen on the Chinese mainland to develop Internet software and supercomputing servers. "We are designing servers with huge databases at the core. As part of this, we will develop a centralized database. We will turn a computer inside out by making the database the core, instead of microprocessors," Yung notes.
By December, Shell hopes to ship these "super servers" to clients. Further, it has set up joint ventures with Silicon Valley-based companies to make "revolutionary types of diodes and rectifiers with improved energy-saving and performance features".
It was in 1952 that Shell began operations, making ballasts and transformers for tube lights and neon signs. Three years later, it started on its long road of diversification by setting up a division to manufacture ceiling fans. "With air-conditioners becoming popular, many felt that we would be soon out of business. But we defied sceptics. The business continued to grow in the 1970s on the back of the energy crisis," Yung says.
Success in the US market led to the establishment of its first overseas company in 1978 in Los Angeles to manufacture fans. This was followed by an office in Dallas. Back home, Shell decided to diversify, and in 1983 set up a division to develop microwave ovens. These were sold in Europe. Offices in the Netherlands and Germany were established.
Keen to diversify further, a division was opened to manufacture phones for the US market. A momentous decision was made in 1985 to move to the Chinese mainland by opening a fully integrated assembly factory in Shunde.
In 1985, Shell went public to raise additional cash to fund its expansion plans. A decade later, amid rising competition and lower margins, the microwave oven factory was sold to the Whirlpool group for US$150m.
Next Shell set up SMC Multimedia (HK) Ltd to make VCD and DVD players, before branching into digital cameras. So it was a logical move to enter the hi-tech optics sector on the back of increasing competition in consumer electronics, Yung explains. If the first 50 years is any indicator, this will be the first of many transformations ensuring Shell stays ahead of the curve for the next half century.
WRITTEN BY ARAVIND VIDYADHARAN
Shell Electric Mfg (Holdings) Co Ltd
Shell Industrial Bldg,
12 Lee Chung St,
Chai Wan Industrial District,
Chai Wan, Hong Kong
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