Future Plans

Our strategies and future plans are as follows:

Enhancing our position as a supplier of a comprehensive range of marine electrical products
Since FY2003, as our marine electrical products are subject to a low obsolescence rate, we have pursued an ongoing strategy of increasing our inventory level, both in quantity and range. As such, we are able to offer the necessary quantity and range of marine electrical products promptly to our customers. We intend to maintain this strategy in order to respond to more customers expeditiously as a timely supply is of key importance to our customers who are subject to tight time charters of its vessels and high berthing costs. In addition, in pursuing a strategy of maintaining higher inventory levels, we potentially enjoy certain advantages such as volume discounts and strengthened relationships with suppliers.

Focussing on shipyard operators and ship repair contractors
In view of the anticipated increase in shipbuilding and ship repair activities in the Asian region, we intend to increase our marketing efforts to shipyard operators and ship repair contractors. In FY2004, revenue derived from sales to these customers increased by 72.4%. These customers have higher technical requirements when building, repairing, retrofitting or upgrading vessels. They expect prompt and effective technical support and services from their suppliers. We intend to expand manpower to provide dedicated and improved marketing and technical support to such customers, thereby developing stronger relationships with them. In the future, we intend to target other shipyard operators and ship repair contractors in the region.

Enhancing our inventory and logistics management capabilities
An efficient management of inventory levels, orders fulfilment and logistics are important factors to our business. Our strategy is to enhance our inventory and logistics management capabilities. In connection with this strategy, we have acquired new facilities at 8 Penjuru Lane to further enhance our inventory and logistics management capabilities. In particular, our total warehousing space has increased from approximately 27,000 square feet to approximately 70,000 square feet as a result of this acquisition. With a larger warehousing space, we are able to stock more marine electrical products and thereby enable us to respond to our customers more expeditiously. In addition, we will continue to enhance our capabilities through increased recruitment of qualified manpower.

Increasing marketing efforts in our other markets
Our sales to Overseas markets which are mainly the Middle East, Indonesia, Japan and Malaysia accounted for 14.1% of our revenue in FY2004.We intend to expand our marketing team and to increase our marketing efforts in these markets. One of our plans is to publish annually a comprehensive catalogue of our products for international distribution. We will also explore the prospects of appointing distributors or forming joint ventures with marketing corporations in these countries.

Developing and expanding a suitable portfolio of OEM products
For a number of years, we source marine electrical products under OEM arrangements and sell them under our own brands. Such OEM marine electrical products are usually purchased by our customers as regular purchases alongside their other purchases. We intend to develop and expand a portfolio of OEM marine electrical products bearing our own brands, brands of the OEMs or as unbranded products. Zhejiang Haixing is an example of a manufacturer from whom we source OEM products under their brand and as unbranded products. This strategy leverages on our position as a supplier of a comprehensive range of marine electrical products in Singapore. As we intend to focus on competitively priced, value-for-money products that can be incidental or repeated purchases alongside our customers’ other purchases, we expect that our strategy would not materially conflict with the interests of leading manufacturers who are supplying us with their products.