Jabil Circuit is one of the leading providers of electronics manufacturing services (EMS) in the world. Its largest segment, diversified manufacturing services, includes higher-complexity specialized services products, as well as healthcare and CleanTech (energy, water, and materials) offerings. Parts made by Jabil on a contract basis are also used in computing and telecommunications products, as well as consumer products such as set-top boxes and printers. The company's services range from product design and component procurement to product testing, order fulfillment, and supply chain management. It serves customers worldwide and gets most of its sales from international operations.
The company operates in nearly 30 countries. Mexico and China are Jabil's largest markets, each accounting for about 20% of sales. The US comes in at about 15%, and the company's fastest-growing market, Malaysia, accounts for more than 10%. Malaysian sales grew more than 115% year-over-year
Sales and Marketing
Jabil generates nearly half its sales from five customers. Its top customers include Apple (13% of sales), Cisco Systems (10%), and Research in Motion (10%).
The company's sales rose by 4% to $17.2 billion in fiscal 2012 (ended August 31) as strong growth in its diversified manufacturing services (DMS) segments offset declines in the rest of the business. DMS sales rose nearly 25% as the company was able to secure additional business from existing clients. Net income was also up 4% to $395 million.
To compete in a rapidly consolidating industry, Jabil provides production on a global scale and operates through semi-autonomous business units that are dedicated to individual customers. The company continues to add services and to expand globally through acquisitions, including deals to acquire manufacturing operations from customers looking to reduce costs through outsourcing. Jabil has acquired or established manufacturing facilities in regions with lower operating costs, including Brazil, China, Hungary, India, Malaysia, Mexico, Poland, Russia, Turkey, Ukraine, and Vietnam.
In other regions, the company has rid itself of operations, particularly in Europe, where production costs are higher. Jabil sold its French and Italian operations in 2010; however, months later, in 2011, Jabil bought back those operations to appease impacted customers.
Mergers and Acquisitions
Back on domestic soil, Jabil acquired Texas-based Telmar Network Technology in late 2011 to bolster its aftermarket services. With nearly $150 million in sales in 2010, Telmar's communications and network products and services was to be integrated with Jabil's DMS segment. – less