VoIP to boost Aztech growth

Singapore's Aztech Systems Ltd, which makes computer peripherals and telecoms equipment, expects sales and earnings to grow 25-30 percent a year over the next few years, on robust demand for broadband and Web-based phone gear.
When asked what growth rates Aztech was targeting for its sales and earnings in the medium term, Chief Executive Michael Mun said on August 21 that he expected the historical trend to continue.
"Historically, we have been able to maintain 25-30 percent growth for both sales and earnings, and we are trying very hard to see how we can improve this going forward," Mun told Reuters in an interview on Monday.
Increasing orders for Internet Protocol (IP) phones, wireless LAN adapters and broadband gear for developing markets would drive growth in the final six months of the year, he added.
"We're focusing on VoIP (voice-over-Internet-Protocol) phones which are increasing in popularity in US and Europe - telecom operators are very aggressive in pushing such products, while small and medium businesses are trying to cut costs by using VoIP instead of normal IDD (international direct dialling) services." To maintain its competitive edge, Aztech - which has a market value of about US $62 million - plans to nearly double its headcount to 4,000 in the next two years, from 2,200 currently. It would hire an additional 150-200 research and development (R&D) engineers from the 120 now, Mun said. Aztech also plans to invest S$6 million over the next two years to expand its China factory, and would fund this expansion from internal cash.
"We have positive cashflow from our operations, so we do not foresee any need to raise funds in the short term," Mun said. Mun said the outlook for orders in the second half remains rosy, despite high raw material prices and rising labour costs in China, where the company has its biggest plant.
"So far, our order book has continued to increase from the S$63.6 million as of mid-July, and the momentum is strong - much better than we expected," he said, but declined to reveal the total value.
Aztech began operations in 1986 as a computer sound card maker competing with Singapore's Creative Technology Ltd, and was listed on SESDAQ, the Singapore Exchange second board in 1994.
The firm has since diversified into making cordless phones, Internet Protocol (IP) phones, wireless local area network (LAN) adapters, as well as broadband routers and modems.
Aztech competes with Singapore telecoms equipment maker Giant Wireless Technology Ltd, Hong Kong corded and cordless telephones maker VTech Holdings Ltd and Taiwan networking firm D-Link Corp.