2011 - Li & Fung Limited

CHAIRMAN’S STATEMENT (CONTINUED)
On the production side, it is estimated that Asia will account for
over half of the world’s output by 2050. China has long been
the world’s manufacturing powerhouse, and it remains the
biggest sourcing market for the Group. However, with wages in
the Pearl River Delta rising by 30% in recent times, this region
is no longer the low-cost center of years past. Regions such as
Bangladesh, Vietnam and Cambodia as well as western and
northern China are gaining preference among cost-sensitive
customers.
Operationally, this past year was significant because it marked
the reorganization of the Group structure along three lines:
Trading, Logistics and Distribution. During the year we worked
tirelessly to strengthen these Networks through organic growth
and acquisition while also streamlining operations. Acquisitions
included several large deals and smaller roll-up deals that
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8 LI & FUNG LIMITED | ANNUAL REPORT 2011
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1st Year
bolstered even more our range of products and services.
With these investments, we are even better equipped to grow
organically as future growth opportunities rise with the global
economic recovery.
One particular advantage of having these three Networks is that
by offering an unparalleled suite of global supply chain solutions
for our customers, we will also generate new revenue streams
and drive organic growth through substantial cross-selling
opportunities.
Since the founding of Li & Fung in 1906, we have continually
questioned and strengthened our business and management
methods to adapt to an ever-changing world. In this context,
we have made sustainability a key pillar of our current
Three-Year Plan for 2011–2013, and in 2011 we continued to
expand the implementation of our Sustainability Strategy. This
strategy provides a foundation for our global operations to
integrate sustainability into our business and with our supply
chain partners. Our goal is to implement programs that bring
tangible benefits to the Group and to the world. Within our four
walls, we continued our efforts to reduce our environmental
footprint through reductions in carbon emissions and energy,
water and paper consumption; to engage our colleagues to live
and work sustainably; and to support our communities around
the world. This year also marks a significant milestone as we
developed and prepared for the 2012 launch of our revised
Code of Conduct for Suppliers and new Supplier Compliance
Manual. We look forward to continuing to work with our
partners to build capacity in our supply chain to improve
working conditions and environmental performance and provide
sustainable sourcing options.
With approximately 15,000 manufacturers in over 40 economies
worldwide, Li & Fung remains in a very advantageous position to
prosper in the coming years. However, it will also be critical for
us to continue working closely with our partners and customers
to help raise the quality of supply and manufacturing throughout
the network.