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Electronics Production | March 07, 2008

Romania a new EMS hotspot in Europe

EMS and OEM are constantly looking for some new hot spots to produce electronics. In Europe, Romania has recently become a new hot spot to invest in.
Nokia recently kicked of its production in Cluj, Romania. By this decision many suppliers have shown their interest to start there business in Romania to be closure to their customers.
Labour cost in Romania are not as low as in China, but for European markets Romania is nearly the same as China on a total landed cost basis.

Romania has the lowest labour costs of all European Union members, according to research by Technology Forecasters. In Germany there are the highest labour costs in the whole of the EU.

In 2005 an employee in Romania earned approximately US$5,000 per year, compared to Germany with US$30,000 per year.

Some of the EMS providers which have there plants in Romania are Celestica, Elcoteq, and Flextronics. These are just some of the giants, but medium and small European EMS providers are also operating in the country.

One Elcoteq plant in Romania is located in Arad, and it was acquired by Elcoteq from a customer. The plant produces sub-systems and other components for base stations for that customer. Carsten Barth, Elcoteq’s director of marketing and communications, told Technology Forecasters “You don’t go to Romania because it is so much better than Poland.” “You look at it from a customer’s point of view.”

Another OEM is also looking closely at Romania. One of the company’s that has been studying Romania is Thomson, using it as one option for making set-top boxes.

Romania is a mix of positives and has needs-to-improve, stated the research by Technology Forecasters. The country is cost competitive, but wages are rising. The country also has a skilled labour shortage. However the government offers tax environment, but concerns persist over corruption and intellectual property protection. The infrastructure is also inconsistent.

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