10 Questions for Fu Yu Corporation

1. Fu Yu Corp has a significant presence in precision plastic injection moulding. How does the company differentiate itself from competitors in the same space?

• As an Industry-4.0 run Company, we leverage smart software which connects our plants to enable data sharing and provide inter-operability solutions. 
• With 6 facilities across Singapore, Malaysia, and China, we provide flexible and diverse manufacturing solutions, allowing customers to adjust their supply chains or manage production across different regions. We can also tap into our engineers and capacity from various sites to collaborate on the same product, enhancing the design and manufacturing processes. 
• Fu Yu is forging strategic partnerships to achieve our goal of becoming a comprehensive solutions provider with integrated box-build capabilities. We have also introduced a New Production Introduction (NPI) team to engage customers in the early product design phase. Our strategy is further powered by our new team of engineers from the design, systems, process, and quality fields, boosting product productivity and quality.

2. Are there considerations such as technology initiatives to help the Group improve efficiency and product quality?

• We have been integrating new technologies such as metal 3D printing to complement our traditional mould-making techniques, allowing us to create highly complex and precisely engineered moulds previously unattainable with conventional methods.
• Our Smart Factory in Singapore has a Manufacturing Execution System (MES) that enables around-the-clock coordination and real-time monitoring of production activities, ensuring seamless operations and rapid response to any issues.
• We have also invested in advanced automation technologies that enable us to operate our production lines 24/7 with minimal human intervention. 

3. Can you elaborate on Fu Yu Corp’s transformation strategies?

We have identified 5 key strategies to address post-pandemic challenges and opportunities:

• A return-to-basics by improving our core strengths in the design and manufacturing of moulds, with our Smart Factory being the key pillar.
• Expand our customer base by targeting the biomedical and life sciences sectors, which offer high growth potential. We have added new biomedical cleanrooms in our facilities in Malaysia and China to support growth in these sectors and will progressively add more cleanroom capacity.
• Promote sustainability and reduce emissions by installing solar panels in our facilities and replacing our hydraulic machinery with electrically powered ones which consume less oil. We also help our customers improve their sustainability efforts by helping them transition to lower-emission bio-rated resins.
• Our NPI team works closely with customers from the design stage of their product, improving product development while shortening the time to reach mass production. 
• Form new partnerships, raise the company’s profile, and explore mergers and acquisitions. In August 2023, Fu Yu was selected to participate in the highly prestigious Enterprise Singapore’s Scale Up program to support our expansion strategies and transformation.

4. What are Fu Yu Corp’s focused markets and are there plans to expand beyond these markets?

• For our manufacturing segment, our product lines are categorised into Consumer, Medical, Automotive & Power Tools, Network & Communications, Print & Imaging, and Others.
• We are also expanding into the high-growth biomedical and life sciences sectors, as our expertise in producing high-precision products and quality control practices are directly transferable for developing advanced medical devices and diagnostic equipment.

5. Can you provide an outlook on the competitive landscape in your industry and how Fu Yu Corp plans to stay ahead of its peers?

• The manufacturing sector in Asia is experiencing a positive upswing, driven by increased demand in areas such as consumer electronics and healthcare, as customers begin to restock their inventory amid the broader global economic recovery. We anticipate steady growth in the sector over the coming years, though it will continue to evolve with trends such as sustainability, technological advancements, customisation, and geopolitical factors.
• Our recent strategic transformation is well-positioned to capitalise on this macroeconomic recovery, and ongoing supply chain reconfigurations are advantageous for the regions where we operate in. Our extensive network and robust supply chain management capabilities will help customers future-proof their supply chains whilst helping us stay ahead of our peers.

6. What are some notable developments that shareholders can look out for or expect in the near to medium term?

• We are preparing to officially launch our Smart Factory in Singapore, which will showcase a range of cutting-edge technologies we have integrated.
• We have also been expanding our cleanroom capabilities across Singapore, Malaysia, and China in response to the growing demand for medical devices. 
• We are also enhancing our manufacturing capabilities by upgrading to newer, more efficient, and environmentally friendly machinery, as well as introducing new secondary processing capabilities,

7. How does Fu Yu Corp engage with its suppliers and partners to promote sustainable practices across the value chain?

• We are collaborating closely with our suppliers to develop, test, and implement resins that are more carbon-friendly and have a lower environmental footprint.
• We are actively engaging with our customers, who play a critical role in influencing our collective carbon footprint, to promote the use of greener and recycled resins. Our efforts include assisting customers in testing and adopting new, carbon-friendly materials, ensuring that these alternatives help reduce our joint carbon emissions without compromising on quality.
• We have also taken significant steps to reduce our carbon footprint through investments in renewable energy. We have recently installed solar panels at our manufacturing facilities in Singapore, which will reduce our Scope 2 carbon emissions, and plan to do the same at our sites in Malaysia by the end of the year.

8. A key cornerstone in Fu Yu’s transformation is your Smart Factory, which will improve manufacturing capabilities and operational efficiency. Can you share what the launch of the Smart Factory means for Fu Yu?

• Our Smart Factory features advanced automation, precision engineering, and comprehensive IoT integration, while the MES offers comprehensive, real-time visibility across all stages of manufacturing, facilitating better resource management and quality control.
• Serving as a central hub, the Smart Factory will also support our facilities in Malaysia and China, particularly in high-tech fabrication and mould design. This integration ensures consistent quality across all locations and safeguards the intellectual property of our customers’ designs.
• The launch of this Smart Factory is a significant achievement in our transformational efforts and positions Fu Yu to better meet the growing demand for high-precision components. This sets the stage for Fu Yu’s sustained growth and leadership in the competitive manufacturing sector.

9. Through your transformation, how will your customer base change?

• We aim to leverage our advanced manufacturing capabilities to attract and serve new clients in the growing biomedical field, even as we enrich our relationships with existing customers. 
• In April 2024, we were appointed by kid-tech startup myFirst Tech to be their exclusive contract manufacturer, marking our first venture into box-building manufacturing of Internet of Things (IoT) enabled smart devices.
• Additionally, our advanced precision tooling capabilities have attracted interest from export tooling customers, and we are excited to build on this growing segment. We have seen good progress on this front, as we have already begun manufacturing tools for a global medical manufacturing player.

10. Why should investors take a closer look at Fu Yu Corp?

• Over the past 1-2 years, we have undergone significant changes that are now beginning to show positive results. These efforts align well with broader economic trends, including the recovery in the manufacturing sector that is driven by growing demand in consumer electronics and healthcare, as well as the beginning of a global inventory restocking cycle. 
• We have a strong product pipeline, and our Smart Factory is poised to capture the rising demand for high-precision components, especially in the biomedical field. 
• Our robust balance sheet also provides a solid foundation for future investments and expansion, which will further drive Fu Yu's financial performance in the years to come and present Fu Yu as an attractive investment opportunity.

10 in 10 – 10 Questions in 10 Minutes with SGX-listed companies

Designed to be a short read, 10 in 10 provides insights into SGX-listed companies through a series of 10 Q&As with management. Through these Q&As, management will discuss current business objectives, key revenue drivers as well as the industry landscape. Expect to find wide-ranging topics that go beyond usual company financials.

This report contains factual commentary from the company’s management and is based on publicly announced information from the company.

For more, visit sgx.com/research.

For more company information, visit www.fuyucorp.com

Click here for Fu Yu Corp’s 1Q24 business update.

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