REL: 1402 HRS Rakon Limited
ADDRESS: RAK: RAK - Annual Meeting Address from the Managing Director
Rakon Limited ASM 2010: Managing Director's Presentation
Good afternoon Ladies and Gentlemen. Well as Bryan said we would like to take
this opportunity today to explain what Rakon's really about, what our
technology is, how it is used and what drives our growth.
Rakon manufactures frequency control devices, Crystals, XOs, TCXOs, VCXOs and
OCXOs. These are electronic components that provide precision timing and are
at the heart of modern electronic systems.
In particular Rakon has positioned itself as a specialist in enabling
communications technologies. We identified a long time ago that there was
going to be a continual and growing demand for people to be able to
communicate with each other, access information in more places, in more ways
and more often.
These days communication is all about moving data, whether its voice,
internet or video and with the introduction of Smart Wireless Devices like
iPhones and iPads, data traffic is exponentially expanding. All this data
needs to travel through networks and these networks have limited capacity.
Cisco for example estimates that data traffic will grow by nearly 4,000% over
the next 4 years and already networks are barely coping.
This means new technologies are constantly being deployed to increase the
amount of data existing networks can carry, as well as entirely new networks
based on new technologies with higher data capacities. All these new
technologies rely heavily on a multitude of frequency control devices which
synchronize and time data transfer. Frequency control devices are essential
for all data transfer, be it through radio waves, fibre optics or copper
wires. Timing devices are used to send it, direct it, synchronize it, encode
it, decode it and receive it.
I'd like to show you an example of a call made from the UK to Auckland and
how Rakon's products feature throughout the framework and infrastructure that
enables this to happen.
When Rakon listed it was with the intention to grow the company to a scale
where it could become one of the largest frequency control companies in the
world. At that time Rakon was New Zealand based but with a well developed
model for outsourcing certain elements of our manufacturing process and a
network of sales engineers in North America and Taiwan. We had a limited but
very profitable product range, and focussed on addressing just a fraction of
the world's 3 billion dollar Frequency Control market. We identified that in
the long term we needed to leverage our expertise and reinforce our
reputation as a technology leader with a larger scale business to provide a
more sustainable and durable business.
Since that time we have invested heavily in building a platform which has the
scale and expertise in line with our goals. We now have a base that is
capable of addressing a large proportion of the market and are in a position
to often select the most lucrative applications in which to invest. We try
to identify the markets with high value add and limited or weak competition,
we also ensure that we balance our business over multiple markets to give
ourselves greater security and stability.
Through a combination of acquisition and joint ventures we've built a global
organisation which is capable of becoming a world leader in all respects.
We've expanded our product range from a niche in GPS to cover a broad
spectrum of Frequency Control Products, from low volume high specification
products for satellites through to very high volume products used for GPS in
mobile phones. Rakon is able to be found throughout the nodes of a
communication network, not just the GPS receiver.
Each location of our businesses provides a unique value to Rakon.
Key to Rakon's success is our business strategy and how we approach the
market. Within our industry we are quite unique with our process of
identifying and taking advantage of opportunities. This is based on a
continual process of innovation and product leadership, backed up by an
innate understanding of the issues facing the industries we service.
Rakon is an entirely customer and market focused company and works
successfully to partner with the industry and technology leaders. Through
this Rakon is able to understand the customer issues and major stumbling
blocks of the future. This then feeds into our research and development team
who develop new technology solutions to address those issues. We then loop
back to the customers in that industry and work with them to implement what
we have developed. Our global manufacturing base of course is there to
support all this and ensure we have the capability to service the
opportunities we create.
The result of this is that Rakon is driving technology forward. It typically
has a 1-2 year jump on the competition and is proactive in seeking out new
opportunities. This also makes Rakon a highly desired business partner for
our customers as they understand that working with Rakon is one way to help
push the performance of their products to the next level.
Using this strategy Rakon is able to be the first into new technologies as
they develop and, because of the global platform we have built, is able to
hang onto them as they develop. We saw the success of doing this with GPS and
are now seeing the results in other technologies such as 4G cellular
networks, high speed fibre optics, smartphones and femtocells.
Our leadership and share of the GPS market I think is well recognised and
understood. Rakon's success has been built on this over many years. The
slide on the screen shows the success we are achieving in two key markets of
telecommunications and phones. The skill and dedication of our people at
Rakon who developed products and worked alongside customers that enabled us
to capture the GPS market is being repeated in these markets.
At Rakon we look at the performance of our business by end market and by our
geographic business units. Our goal is to be the technology leader in our
chosen markets and to capitalise on this by being one of the largest 3
frequency control suppliers in each of these markets. We also expect that
all of our geographic units are sustainably profitable, contributing to a
Group return that meets or exceeds the expectations of our shareholders.
The recent acquisition of the Temex business addresses both of these goals.
It pushes Rakon into the top 5 suppliers of Frequency Control Products to the
Space and Aviation industry, with the opportunity and target to move into the
top 3. It also provides a platform to transform our French business into a
In conclusion today we are recognised as a technology leader in all our
markets. We have growing positions which we consider will ensure we achieve
our goals and we have the business scale and expertise in each location to
deliver excellent returns.
End CA:00199588 For:RAK Type:ADDRESS Time:2010-09-10 14:02:48