Ideas and initiatives for the European PCB industry

In Amsterdam today, some of the movers and shakers of the European industry got together to discuss the opportunities offered by new ideas, initiatives and technologies in this challenging market.

I know what you are thinking. Opportunity? Amsterdam? What have you guys been smoking? Well the truth is the industry is very challenging at the moment, the market is very hard and on a global level times are tough. But with this comes challenges; business challenges, fiscal challenges, technical challenges and market challenges. Some see those challenges as opportunities in which they can prosper and utilize their skills.

The first session of the day was opened by Rex Rozario, EIPC Chairman and President of Graphic. Rex opened with an objective view of the market and its challenges, before introducing the first group of speakers and handing over to Peter Starkey, who was to moderate the session.

The first presentation was from Ivan Ho, GM of Top Notch Partners Ltd., who presented a detailed picture of the Chinese PCB industry. Since the last downturn, when the internet bubble burst in 2000, China has grown to become the largest producer of PCBs in the world, overtaking Japan. This is a result of migration of production from all over the world. In his paper, Ivan discussed the state of the Chinese PCB industry and the challenges it faces, many similar to those faced in the west. In some cases, PCB companies find themselves in very difficult positions with thousands of staff whose labor is surplus to requirement. Ivan also outlined the real ownership of Chinese PCB production, with small amounts being owned in China and the majority in Taiwan or Japan.

Ivan went on to explain some of the cultural issues in China and how these impact their business behaviour and what that means if you have a relationship with a Chinese manufacturer. Ivan underlined the importance of face to face contact with the people that you are working with in China and just being there - visiting the factory, spending time, making friends, not just business acquaintances. It is not enough just to keep in touch via email and phone, you need to get to China, have a drink with them, go and do karaoke, have dinner and generally get to know the people you are doing business with.

Finally, Ivan’s paper showed ways to minimize the risks of being active in China, whilst helping the delegates to understand the Chinese mindset. For me this was the real value, putting the delegate in the position of the Chinese business owner and trying to understand their motivations and behaviours. China is a reality of the PCB landscape, it has to be considered, discussed and understood if we are to form valuable business relationships, whether those relationships are as suppliers or as partners.

The second paper had a title that compelled the audience to listen – Strategy for Survival! The paper given by Giacomo Angeloni of Somacis from Italy was both interesting and entertaining. Giacomo had inserted enough relevant and amusing illustrations into his presentations to keep the delegates focused on the material he was presenting.

Using a number of news snippets, Giacomo showed that no region is immune to the current downturn, both in the PCB and the EMS sectors. He went on to discuss real cost saving opportunities including the reduction of what he called ‘real lead time’ – the time between buying material and being paid for the product made from that material.

He also talked about SurfEnergy, which is a free resource and aims to contribute to strengthening competitiveness in the main target groups of surface engineering and printed circuit board industries by achieving the wide introduction of energy efficiency measures. The project duration is from September 2008 until August 2011 & will address non-technological barriers to the implementation of efficient energy management in these SME-dominated “kindred” sectors. The project objectives are to overcome the key barriers of increasing awareness to the potential benefits of introducing energy management systems and providing energy efficiency solutions based on analysis of generic production processes. You can learn more at www.surfenergy.eu.

Another of Giacomo’s strategies was to move up the technology curve, a strategy that has served Somacis well. They now have more than half of their production in the higher technology sector. Another part of this strategy is the speed at which manufacturing takes place. An intensive campaign of investments focused to the technical enhancement of the Italian plants now allows SOMACIS to add a new fast prototyping service to its traditional product & service portfolio. The third part of the production strategy is certification, which includes: UNI EN IS0 9001:2000, UNI EN 9100:2003, UNI EN ISO 13485:2004 (specific for medical), UNI EN ISO 14001:2004, ISO TS 16949 (Automotive), UL E79889, UL E211432, UL E315722, Nadcap AS7003. SOMACIS is member of the Nadcap Electronic Task Group (ETG). The Nadcap ETG is the task group dedicated to the definition of both the specifications and the documentation necessary to the evaluation of PCB supplier companies for the Aerospatiale market during the Nadcap certification audits.

Another strategy applied by Somacis is the M&A route. Dongguan Somacis Graphic PCB Co. Ltd is a 50/50 joint venture between SOMACIS pcb industries and Graphic plc, giving both companies a real presence in China and the start of aa global footprint. Clearly partnerships are just part of an overall strategy, but in such times, a very valid approach! The China facility is European owned, locally managed by Chinese staff and full of flagship European manufacturing equipment. The factory benefits from strong support from local government, a guaranteed power supply, and strategic suppliers located in the area which is located one and a half hours from Hong Kong.

In conclusion, Somacis are utilizing a few key strategies to survive and hopefully prosper in the current market. They are cost reduction, innovation and making a group.

Following the first session I interviewed both Giacomo Angeloni and Iva Ho – you can see these interviews on EMSpeople under the video tab.