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Electronics Production | March 09, 2009

Romania transforms into fastest-growing Outsourcing Hub in Europe

Romania has been attracting many contract manufacturers due to low competition and operating costs, making it one of the fastest-growing electronics manufacturing services (EMS) markets in Eastern Europe, states market researcher Frost & Sullivan.
New analysis from Frost & Sullivan, Romanian Electronics Manufacturing Markets, finds that the markets earned revenues of over $1.6 billion in 2008 and estimates this to reach $3.38 billion in 2014.

"Romania has been leading the paradigm shift in contract electronics manufacturing, which has been driving EMS providers in search of lower cost locations in Central and Eastern Europe (CEE)," says Harish Natesan, Frost & Sullivan Research Analyst. "Attractive investment incentives and Romania's strategic location have also made the country a preferred destination for EMS providers. Romania is poised to emerge as one of the largest electronics outsourcing industry in the long-term."

Romania's strategic proximity to Western Europe combined with its low corporate taxation policies and low-cost labour force has made manufacturers realise that it is an ideal location for electronics manufacturing. Due to these multiple advantages, Romania is gaining the edge over other countries in the region.

The economic slowdown that spread to Europe in 2008 has had an adverse effect on Romania. Decreasing demand in key end-user segments has been restraining the market since 2008 and is expected to persist in 2009. The global economic slowdown will impact market revenues appreciably in 2009 with market growth rates expected to fall. Consequently, electronics assemblers are downsizing labour and volumes to save on operating expenses and maintain profitability.

"Operating in Romania is considered by many EMS executives as being equivalent to operating in China, in terms of total landed costs," concludes Natesan. "Further, proximity to Western European markets and shorter supply chains has made Romania an irresistible location for EMS providers."

Image source: Flextronics

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