· 我们通过与 OEM承包商的安排进行生产
Our Production Through Arrangements with OEM Contractors
During the Track Record Period, we outsourced the manufacturing of our certain self-branded jewellery products to OEM contractors. Utilising OEM contractors for production offers us the opportunity to focus our resources on key stages of our business, such as product development, brand promotion and management, and sales and distribution. This strategy also allows us to avoid extensive direct exposure to the risks and expenses associated with operating production facilities, while at the same time, promptly adjusting our product offerings in response to shifting market trends so as to maintain a highly competitive cost structure.
The OEM contractors who manufacture our products are generally specialised in the production of jewellery products and experienced in providing outsourcing services. We carefully select OEM contractors from a broad range of candidates and establish stable relationship with our key OEM contractors. We require our OEM contractors to provide us with the relevant licenses and certificates. In addition, we would conduct on-site visits and evaluations before procurement of each batch of products. We evaluate potential new OEM contractors with regard to their infrastructure and production capacity, market reputation, financial condition, manufacturing costs, operating history and their ability to meet our specific quality and quantity requirements.
Our Planned In-house Production
To take advantage of the relatively lower costs in Jiangxi, the close proximity our silver ingot supplier China Silver Group and to allow us to handle orders that our OEM contractors may not be able to fully handle, we plan to build production facilities in Jiangxi Jiyin. Jiangxi Jiyin occupies a total gross floor area of 1,373.8 square metres in Ji’an city, Jiangxi province, 877.8 square metres of which are expected to be used for production. We incurred capital expenditure in an amount of approximately RMB2.7 million in the ten months ended 31 October 2017 for purchases of production equipment and construction of the facilities. Jiangxi Jiyin is expected to have an annual production capacity of approximately 53 million grams of silver bars and limited categories of other silver jewellery products such as silver bangles, which represents approximately half of the total volume of silver products as measured by grams we sold in 2016. As of the Latest Practicable Date, Jiangxi Jiyin had not commenced any production operation and the production was expected to commence in March 2018. We are in the process of sourcing equipment and machinery for our production facilities at Jiangxi Jiyin. To ensure we are equipped with appropriate management capacity responsible for the jewellery production business, we are also in the process of recruiting experienced personnel and staff in the relevant fields. We expect to continue outsourcing the manufacture of our gold products, a substantial portion of our silver products and certain gem-set and other jewellery products to OEM contractors.