Growing UK EMS in a tough market

Paul Gill feels positive about Hansatech's future. Last year the company reported a 17% growth in turnover (£8.1Million) and, according to Gill, took in 30 percent more customers. He's hopeful that tread will continue into 2012 and 2013. “The year started pretty well. We've received a million dollar order for telecom equipment, which was good news a few weeks ago. We are very much focused on delivering that,” Gill said over the phone. “But also we're moving into a new market of automatic number plate recognition systems”. Gill expects the first of these products to be developed in March. Growth has translated into new capital investment as well – the company plans to consolidate its surface mount kit into a new Europlacer platform by early April. This sounds good, but how does the company compete against the EMS providers in Eastern Europe? The favorable currency rate for UK production is helpful, says Gill, but it's also important to differentiate the company through its staff experience and technical skill. “Hansatech has been manufacturing for twenty seven years in this area and we have forty highly skilled staff who are involved in electronics engineering, mechanical engineering, customer support, procurement,” he explains. “It's not the type of thing you can just buy out of a university. It has to be real hard nosed experienced people that we employ and if you look at the length of service in the industry within our staff its quite substantial”. The company also believes it can be competitive by producing products not yet established on the market. “If we look at where we are growing, we are attracting more new innovative products. So (how) Hansatech differentiates itself really is by technical resources, technical support,” suggests Gill. “We attract far more new products than, if you like, existing established products in the EMS market. We tend to look at, for example, defense companies who are diversifying into commercial markets. We look at lots of new products introductions and then we grow the bulk of the business based on when those products turn into volume”. Part of this approach means diversifying its production. “Number plate recognition is one of those and we'll be making a big push into medical products in 2012,” Gill says. Gill argues that flexibility is also vital to surviving in a European climate dominated by economic uncertainty. That's flexibility to produce short term orders as well as flexibility to be lean during quiet times. “The UK is predominantly exporting to Europe and if the euro zone is depressed in someway it effects everybody. And we are at the sharp end of that type of effect,” he says.