Written by John Reville
Zurich (Reuters) -Logitech International will reduce the impact of the tariff policy of US President Donald Trump by converting some mice production on the computer and other peripheral devices away from China.
CEO Hanik Faber said it will take an active approach to dealing with commercial barriers, a special source of concern for Logitech, which produces all its products outside the United States, although the country is its largest market with 35 % of sales.
“We will play the attack while exercising strong discipline in cost and acting with light movement.”
The Swiss American company is currently making nearly 40 % of its products sold in the United States in China, which created a difficult situation after Washington imposed import duties of 145 % on the goods from Beijing.
Logitech now wants to reduce the share of Chinese Chinese products that are shipped to the United States to 10 %, by converting more production to Vietnam, Taiwan, Thailand, Malaysia and Mexico, as it has arrangements with contract manufacturers.
Faber said: “We are in a lucky position that we have invested in a really diverse manufacturing imprint,” Faber said. “Although I will not say it is easy to change the size, our team is doing a great job in a quickly converting the sound to alleviate the effects of customs tariffs.”
Other moves included raising prices in the United States by about 10 % to compensate for definitions, while the company will also focus on the rest of the world as it gets 65 % of its sales.
In addition, the costs will be reduced, for example by delaying employment, and reducing spending on travel and other expenses
The plan was revealed, as Logitech reported 16 % to $ 133 million in the quarter ending in March, which led to estimated the estimation of analysts of $ 134 million.
The quarterly sales were flat at $ 1.01 billion, less than 1.03 billion dollars, and the views of the analysts collected by the visual Alpha.
Michael Voyth, a bank analyst, was encouraged by the Logist plan, while the stock was 1.5 % higher in early trading in Zurich.
“From the site of competitiveness and financial strength and with a very graceful production, the company has a convincing record to successfully compete in difficult times,” said Voith.
(Participated in the reports of John Reville, Janaki Venjoballan and Mermaee Dai in Bangaluru; Liberation by Shailsh Cooper and Cristian Shamoulinger)
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