Flextronics International Ltd. said it has signed a contract with Hewlett-Packard Co. to provide design chain, manufacturing and other supply chain management services in Brazil to support the company’s printing and personal systems business in the South American country.
Under the terms of the agreement, Flextronics is expected to offer a wide range of services to support one of HP’s biggest money earners in Brazil. The contract builds on other services Flextronics is already providing to HP in the country, according to the Singapore-headquartered company. HP is itself looking for further reduce costs by outsourcing more of its manufacturing functions to contractors.
"Optimizing the number of suppliers and processes in our supply chain creates value for customers, shareholders and HP," said Tony Prophet, senior VP, PPS operations at HP in a statement. "Flextronics will provide a low touch, high speed supply chain in Brazil to drive efficiencies and cost savings which are core elements of our continuing supply chain transformation."
HP is one of Flextronics’ biggest customers and in the company’s fiscal 2012 represented more than 10 percent of the electronics manufacturing services (EMS) provider’s revenue. This fell below 10 percent of company-wide revenue in fiscal 2013 ended March 31, according to Flextronics’ most recent annual filing with the U.S. Securities and Exchange Commission. The Brazil contract could increase sales to Flextronics from the PC and printer OEM.
"We are honored that HP has chosen to partner with Flextronics on its PPS business in Brazil," said Mike Dennison, president of High Velocity Solutions at Flextronics in the statement cited above. "Expanding the services we provide HP in Brazil to include an end-to-end ecosystem is a great example of the strong supply chain solutions we can provide our valued customers.”