Message from Executive Chairman/Founder

Datuk Goh address the company's situation in this global economic uncertainty

   

 

 

 

 

 

 

 

The world economy is going through a very challenging period now. This prolonged economic turmoil is marked as being the highest record of company foreclosures and company buy-out of thousands of workers.

We in Cubic, mainly our core contract manufacturing business in Melaka (Cubic Electronics Sdn Bhd) has not been spared by this drastic economic downturn. The crux of the situation escalated mainly due to the significant drop in demands of products from our core customer - Creative Technology Ltd (CTL).

With the clear intent to build competitive advantage during the downturn, CESB has also taken the decision to discontinue those manufacturing businesses that are not profitable and with high exposure risks which currently includes our contract manufacturing for CTL products.

Fortunately over the last one year, we have taken cost saving measures and have been by right-sizing our manufacturing operations with intention to position and strengthen ourselves to be competitive and cost effective especially in the contract manufacturing business. We wish to inform that all these cost saving measures are gradually showing positive results and we confident that CESB will overcome the challenges and emerge to be a stronger business entity in next 12 months.

Our first proactive approach we took to right-size the organization was done in retrenching our Indonesian foreign workers as stipulated in the retrenchment guidelines by the Malaysian Government. The local employees retrenchment had to be also executed and it was an emotional and very painful exercise/ experience. However we had prearranged through our Group's Learning Thrust - Cubic Integrated Learning - to schedule and conduct systematic training programs for workers who were retrenched from CESB and other industries in Melaka. The main objective of such trainings are to provide information and support for affected workers so they can access alternative employment after these training sessions, which includes upgrading courses and managing funding incentives to encourage skills-certification and lifelong learning.

Times of uncertainty are full of challenges—but also opportunities. Thus, we have also taken this opportunity to emerge from this crisis with a profoundly different economic profile than when we went in with. Cubic Integrated Manufacturing, our Manufacturing thrust of Cubic Group, have been aggressive and taken calculated moves/ decisions in securing new manufacturing business from new customers. Additionally, we are also currently working on a few joint ventures and Merge & Acquisition (M&A) projects in new manufacturing businesses and operation.

We need to transform ourselves beyond our core product and capabilities, thus moving up the manufacturing value chain. With these new businesses, Cubic Integrated Manufacturing, will now emerge stronger and on a new competitive platform level in the market, an independent OEM/ODM Manufacturer providing total integrated Electronic Manufacturing Services (EMS) - from concept to creation, from design to manufacturing, from fulfillment to after market support serving multi brand customers in a wide range of market segment.

We also wish to announce that in view of the present stock prices in stock markets that have been adversely affected by the current economic turmoil and in addition to certain conditions precedent in the sales & purchase agreement that could not be satisfactory resolved, we are reassessing the proposed sales of 80.1% of the issued and paid up share capital of CESB to JUKEN Technology Ltd (JUKEN) which we entered in agreement in April last year.

With this, we are confident that we will see a positive financial performance for our Manufacturing Business and Operations for FY 2009. We remain committed to our vision for Cubic Integrated Group of Companies .