SITA: 2019 was a successful year for Foxconn Slovakia
07. January 2020
Foxconn Slovakia managed to achieve planned revenues despite a slight decline in demand and a decrease in production volume, reports the news agency SITA. The article was also published by other media, for example regional daily MY Nitra from SME newspaper group.
“We estimate revenues at the same level as last year. We are glad because of the strong competition and significant erosion in the flat TV market last year,” said managing director Peter Hrčka.
Current orders show that this year the company should have a similar production volume as in the previous year. “Due to the type of the product, we have a fixed production plan only for one week, but we assume that the mix of hundreds of models will continue to change as it did in 2019. However, we expect that we could achieve approximately the same revenue,” assumes Hrčka.
Factors affecting the company
Last year, the company was affected by several short-term and long-term factors in terms of sales. “The price struggle on the store shelves was reflected in the production mix. Certain segments have fallen, others have grown. Our advantage was the extension of the OLED TV range as it is a new technology and not all manufacturers have it in their portfolio. We also started to produce a TV with 8K resolution,” explained Hrčka. However, the company feels the unfavorable situation from the cost side.
“Due to lack of workforce and increase of bonuses or the introduction of holiday vouchers, we have significantly increased labor costs, where I must say that there is an increasing disparity between job seeker qualifications and labor costs. Such changes affect companies like ours, which employs high numbers of people because of the type of the product and its life cycle,” Hrčka noted. The company also did not like the jump in real estate tax and the continuous increase in energy prices. “We were completely surprised by the unconceived decision of the state in granting support to overcome this fact,” he added.
The only constant is a constant change
“The consumer electronics market is dynamic in technology development and our company therefore adjusts technology, modifies production lines and changes processes every year. Since we are not the owner of the final product and cannot directly influence its sales, we have to earn by continuously improving process efficiency. The only constant in our business is the constant change,” remarks the managing director.
Currently, according to him, the majority of production is consumer electronics, which is subject to significant seasonality, and it determines the employment in the company. “We sweat every spring to introduce new models, and then in the last quarter, when demand for the Christmas market is quadrupled. Last year we increased our staff, but seasonal growth of 3-4 months has to be solved by seasonal workers and cooperation with ADZ (Temporary Employment Agencies),” he explained. Since the company plans a similar production volume in 2020, it expects approximately the same amount of employees. “However, we expect some minor corrections as we continuously invest in efficiency of production and management processes,” Hrčka added.