As we approach the Small Cap Awards, due to take place on 25th June, Master Investor profiles some of the companies shortlisted. Volex has been shortlisted for the Company of the Year award.
- Please provide a brief description of the business
Volex is a leading integrated manufacturing specialist for performance-critical applications and power products. We serve a diverse range of markets and customers, including medical cable assemblies, data centre products, electric vehicles and consumer electronics.
We are headquartered in the UK but operate from 14 manufacturing locations and employ over 6,000 staff across 20 countries.
We have two divisions – Integrated Manufacturing Solutions (sales of $220 million in 2019) and Power Products (sales of $171 million in 2019)
- 2019/20 was clearly a strong year for the company, to what do you attribute your success?
Our success has come from our focus on strong engagement with our customers. We engage with their product development cycles at an early stage to provide solutions that meet their specific requirements for product performance and improved quality, greater efficiency and timely delivery. Through the provision of these services we seek to create sustainable value for Volex and its shareholders.
We have managed to create a very diverse business –in terms of product spread, customer mix and geographical presence. Our customers value a global presence and a partner with a strong balance sheet. Volex has been around more than 100 years and customers appreciate our reputation for quality, reliability and longevity.
So in summary – the Volex success comes from experienced management, committed employees, a strong capital structure, our global reach and very deep technical knowledge in medical, high speed data centre and electric vehicle interconnect technology.
- How would you characterise the long-term drivers for your business?
The main end markets for Volex are medical imaging and diagnostics, high-speed data centres, electric vehicles, and general industrial and consumer electronics. Our investment focus, in terms of organic investment and acquisitions, has been on the higher growth areas of Medical, Data Centres and Electric Vehicles.
Medical – Technology is changing medicine. Advances in diagnostic and therapeutic devices are bringing a range of new treatments to patients around the world. Earlier identification of serious illness and longer life-expectancies are increasing demand for medical technology. Patients are expecting the best possible treatment to encourage optimal outcomes. Healthcare spend as a percentage of GDP is increasing
in many economies. Volex provides complex electro-mechanical sub-assemblies to the leaders in medical technology.
Data Centres – The adoption of cloud technology has revolutionised the information- processing and software sectors. Cloud is often the default choice for complex deployments and challenging global rollouts. Consumers have embraced cloud technology through streaming and social media. And as cloud demand grows, data-centre capacity grows. This creates challenges for data architects who must design scalable and cost- efficient data centres that can meet end-user expectations with respect to availability and speed. Volex cables and connectors are at the heart of these data centres.
Electric Vehicles – A greater awareness of the environmental impact of passenger vehicle emissions is seeing a move towards electric vehicles (EV). This is a consumer-led trend with government support. Acceptance of the electric vehicle proposition is growing among car buyers as the charging infrastructure improves and range increases. Volex supplies charging cables and connectors to the world’s largest manufacturers of electric vehicles.