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© beatricee _dreamstime.com Electronics Production | February 15, 2016

'There is tremendous untapped potential for SVI in Germany'

2015 was certainly not a year for the weak – mergers and acquisitions within both the semiconductor industry, and the EMS industry kept us all on the edge. And here comes SVI, kicking off 2016 with a totally unexpected acquisition.
SVI, a Thai-based EMS provider with several manufacturing sites within the country. And Seidel Electronics, an Austrian EMS provider with manufacturing facilities in Austria, Slovakia and Hungary and design centers in Vienna and Slovenia. That's a combination that makes up one rather big and diverse EMS player.

Evertiq had a quick chat with Robert Sawyer, a Senior Director with SVI in Thailand who is in the process of moving to Austria to take up the role of CEO for the group of companies in the acquisition, to get some more information on what kind of company the combination of the two might become.

With the addition of Seidel, SVI is getting additional production strength – mainly located in Europe. But what kind of synergies and improvements can we expect from the acquisition?

Robert Sawyer © SVI
“We see strong sales synergies in two directions. First, SVI's European customers have long been asking us to offer a production option in Eastern Europe for their products to be delivered to Europe – in other words, production in Europe for Europe. Now we can offer that. Secondly, Seidel's situation was the reverse, namely lacking an Asian site for high-volume mass production at most competitive costs, or production in Asia for delivery in Asia. We've both been missing business as a result, but now, together, we have the solution,” says Robert Sawyer.

An interesting side note is that Europe has – for a long time – been SVI's biggest market, and this without having a production within the region. Robert elaborates to me that SVI has long managed to project itself almost as a "European company with operations in Asia" rather than the other way around. And that its office in Copenhagen, Denmark, has been quite successful in serving the company's European customers and building up a solid reputation, especially in Scandinavia.

“With sites now in Austria, Hungary and Slovakia, and design teams in Vienna and Slovenia, we can operate as a truly European player and offer the right end-to-end design and manufacturing solution for our customers depending on their needs. We don't anticipate transfers in either direction for products already in production – there's no real value in simply shifting things – but we do anticipate that business will change for the better with a larger presence in Europe and more options for production, logistics and services,” Mr. Sawyer explains.

SVI being an Asian company, and Seidel being a European company – how will you capitalise on the different cultures that you now have in one single company?

“We will strive to offer the 'Best of East and West' from our different locations. The fundamental cultural values, visions and missions of Seidel and SVI are already well-aligned, which was part of the initial attractiveness of the acquisition, and we expect that this will ease the transition as we integrate the two companies. There will be many opportunities for employees from both sides to travel to the other or even transfer as we start implementing projects, and we expect to see "cross-pollination" benefits from collaboration between our European and Asian teams.”

SVI will also capitalise on the acquisition is Seidel's strong position in German-speaking Europe.

“There is tremendous previously untapped potential for SVI in Germany/Switzerland/Austria, and now we have a very strong team on the ground and marquee set of reference customers in that region.”

The companies do offer some synergies, but they also differ from each other and serve different segments, what impact will the acquisition have on the company's market strategy?

“SVI serves a few markets that the Seidel companies had not, for example, Communications & Networks and Optoelectronics as well as high-end Audio/Video, so that will help blaze a trail into those markets for the former Seidel European facilities. In the other direction, Seidel is particularly strong in Public Transportation where SVI had not played, so this opens an interesting new market for SVI. And Seidel brings additional depth in the Medical Device & Equipment and Automotive markets, bringing a strong reference base and experience into the group.”

Having production in Europe usually comes with a greater cost than that of Asia – will you keep all the employees from Seidel?

Mr. Sawyer tells me that the employees of Seidel were the biggest asset in the acquisition, and that SVI intend to keep them all. He also adds that company is already planning expansions.

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