6
GDS Global Limited Annual Report 2015
At the baseline, we saw a 24.1% decline in our
net profit in FY2015, squeezed by rising cost
pressures that included labour and overheads.
Nevertheless, we managed to keep our gross
profit margin healthy and relatively stable at
43.6% in FY2015, compared to 46.5% in FY2014.
Corporate Developments
As in past years, research and development
continued to feature prominently in our overall
business strategy in order to maintain our edge
as an innovation frontrunner in commercial and
industrial door systems.
Much of our research and development efforts
last year centred on rigorous fire testing of the
insulated fire panel shutter that we designed
in FY2014 and for which we had already filed
the patent applications in Singapore and
internationally. Not only will this product sport a
contemporary look, it will also result in reduced
labour content in our manufacturing and
installation processes, making it a game changer
in terms of optimising resources allocation and
costs in our industry today. Even though it takes
time, fire testing is mandatory for our business,
in line with increasingly stringent fire safety
standards. We will continue to fine-tune the
design and revise our patent as we progress with
the fire testing process.
In FY2015, our Taiwan market continued to
perform well on the back of buoyant sales of the
Gliderol
GIANT series hangar doors. We envisage
that we will be able to leverage on the launch of
our newly designed insulated fire panel shutter
to penetrate a significant segment within the
industrial door market in Taiwan.
In the Middle East, the Group continued to face
challenges arising from the region’s geopolitical
situation. Given this, we re-evaluated our position
and re-organised our sales strategy to sell our
products directly to this region from Singapore.
We still see much potential in this market and will
remain engaged in this region so as to be well-
positioned for any opportunities that may arise
when the upturn occurs.
Outlook and Strategies
The Building and Construction Authority (“
BCA
”)
of Singapore expects construction demand to
be sustained between S$29 and S$36 billion in
2015, driven by public sector industrial projects
and institutional and civil engineering works
1
. It
also sees the average construction demand from
2016 through to 2019 to be sustained between
S$26 to S$37 billion per year, underpinned by
infrastructure works needed for Singapore’s long-
term population needs such as transportation and
various public facilities.
Notwithstanding this upbeat outlook for the local
construction sector, the market consensus is that
the sector is slowing down. We expect to continue
to face increasing costs, manpower restrictions and
a general slowdown of the economy in the next
financial year.
Research and development will continue to
be one of our top priorities. We are sticking
to our belief that innovation and product
development is critical to our quest to stay ahead
of the competition. It does not only involve
the development of new products but also the
improvement of our exisiting products and
processes to meet the requirements of regulators
and customers in the markets we serve.
At the same time, we will also focus strongly on
cost management and explore available options
to streamline our operations and costs structure.
To better address labour-related challenges
in Singapore, we will continue to seek ways to
enhance productivity at GDS with the aim of
maintaining our competitive edge.
One of our strategies to attain this is to reduce the
labour content in our operations and production
processes. Already, our research and development
efforts have yielded products that adhere to
this requirement. In addition, we have started
upgrading works on our manufacturing facility in
Singapore in FY2015, which upon completion is
expected to improve the capacity and efficiency
of our operations. As an added benefit, this
upgrading will also serve to enhance the overall
working environment for our employees.
CHAIRMAN’S MESSAGE
TO SHAREHOLDERS
1
The Building and Construction Authority: “Public Sector Projects To Sustain Construction Demand In 2015”, 8 January 2015
