Global Sources sees little threat from Middle East conflict

PUBLISHED : Saturday, 22 March, 2003, 12:00am
UPDATED : Saturday, 22 March, 2003, 12:00am
 

Worldwide trade facilitator Global Sources said the Middle East crisis posed no big risk to Asia, from where the company derives most of its revenue.


Chairman Merle Hinrichs said purchasing momentum from the mainlandwould continue even if the economy deteriorated.


'Our most important concern is if consumer confidence can be maintained . . . if the economy deteriorates, consumers will be more prudent in spending and shop for products of best value, and China is capable of producing a wide range of quality products with cost advantage,' Mr Hinrichs said.


The Nasdaq-listed company, which depends heavily on export trade for income, connects about 378,000 buyers in more than 230 countries and territories to Asian consumer-product suppliers.


Mr Hinrichs said global buyers were buying more from China.


The development is in tandem with the growing trend of outsourcing production to China, whose exports surged 22.3 per cent to US$325 billion last year.


Its China revenue rose 10 per cent last year and accounted for about 38 per cent of turnover.


China contributed 29 per cent of revenue in 2001 and less than 10 per cent about five years ago.


Global Sources said progress in developing its customer base in China had offset much of the decline in other markets.


'Our focus on growth in China and improved operating efficiencies have resulted in greatly improved profitability . . . in spite of the poor business environment in many of our key markets,' Mr Hinrichs said.


Net profit soared 456 per cent to US$4.3 million last year, compared with US$775,000 in 2001. Revenue fell 8 per cent to US$87.5 million, down from US$95.3 million in 2001.


Online business-to-business operations contributed 60 per cent of revenue and printed trade magazines about 40 per cent. It let attrition shrink its workforce from 2,000 to 1,800 worldwide, but has increased its China team to 850, from about 700 in 2001.


Graphic: glob22gbz


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