© costasz dreamstime.com Electronics Production | September 17, 2013
An EMS market comes to life
During our visit at EMS-provider Altonika, we saw a modern facility and state-of-the-art SMT equipment. However, this picture doesn’t really reflect the general condition of the EMS sector in Russia.
“Less than 10 companies can be called serious players in the Russian EMS industry, focused on contract manufacturing with a high service level. There is Fastwell, specializing in sophisticated military electronics, Etalon or Abres; … there are really only a few. Another part of the EMS market is home to numerous small companies. These are not very active on a broader market and provide services only to a small number of local customers. This seems to be enough for them”, states Semen Lukachev, CEO of Altonika. “Then there are a number of companies – producing their own products – that offer excessive production capacity on the open market. Since they are not well prepared logistically and are less flexible than a true EMS company, they stand for less than 10% of contract manufacturing market.” Altonika's story As many others, Altonika was established as an OEM company (1987), specialising in car alarm systems, medical devices and security systems based on radio transmission. Just after pierestrojka there was no choice – Altonika started in-house production, because there was no possibility to find a proper manufacturing partner. Production competencies were developed and now EMS services is one of the main business activities for the Altonika Group. “We started first with orders for PCB assembly from outside customers in 2006. This was only a side business and not the main focus of the company. Gradually the volume of manufacturing orders increased and as a result of this constant development, the EMS activity was spun out into a separate entity”, said Semen Lukachev. “Of course, we still produce for other companies within the Altonika Group, involving the medical and security markets, but now they stand for only 25% of our assembly volume. When we started as a separate EMS-company in 2010, orders from other Altonika companies stood for 65% of our production volume. As our main goal was to become independent from Group orders, we tripled order numbers from outside customers, servicing numerous companies from automotive, security and video systems, medical, metering and telecommunication markets.” Now the company employs over 300 people in a facility in Zelenograd near Moscow, equipped with three SMT lines and numerous ancillary machinery. Beside manufacturing services (PCBa, wire harnesses, manual assembly), the company offers design and sourcing services. The sky is the limit It is easy to point out the most important success: since 2011, the company manufactures for Cisco. When Cisco needed to have parts of its production in Russia (a wireless station control compliant with the Russian military standard), Altonika was their choice. Now Altonika wants more and at the beginning of July, the company opened a new facility in the European Union. It is located in Dougavpils, Latvia. The company already adapted 1'000 of the available 3'000 sqm for SMT production and started operation with the first 15 employees. The factory is dedicated to serve the Russian customers base as well as, in perspective of 2014, to gain new customers from EU. The workforce gradually will be raised to 100. Semen Lukachev comments on this decision: “We can name three main reasons for having a part of the company abroad. Russia is not an economically and politically stable country, so we always look to operate in more settled conditions. There are also problems with exporting good from Russia. Several Russian companies want to trade freely with the rest of the world, but face tremendous problems to fulfill all administrative requirements. A good example is one our customer, who successfully produces and sells gadgets for the iPhone in the US. And the last reason for establishing the Latvian factory is the cost level, which is far lower than in Moscow where we have high salaries, rental costs and limited access to workforce.” It is still not all strategic changes Semen Lukachev plans to implement. Next year, another Russian facility will be opened, in the Vladimirskaya region. Here again, the company aims to lower the cost level. The factory – with some 100 employees – will focus on orders demanding a significant portion of manual work. “In Zelenograd, we will concentrate mainly on PCB assembly processes, transferring manual operations to Vladimirskaya. We also need to leave some kind of production in Russia - telecommunication or encrypting devices - due to some administration requirement.” Changing electronic industry “The Russian electronics industry is dominated by military and aviation applications. In terms of money circulating within the industry, this group stands for 65-70% of the market. However, these companies are fueled by government money, what makes them easy pry for unclear game rules. What is more, as they basically live on government orders only, their operations are very unstable. Production volume of such companies sometimes depends on one decision from the Ministry. That situation creates too much risk for a private contract manufacturer. Other segments of the electronic market are less volatile and are less affected by economic turbulences. Even in crisis times, people need car alarm systems or medical equipment. At the same time, military expenses can be cut to zero in the space of one day”, explains Semen Lukachov the general layout of the market. But the industry is not as gloomy as this may sound. There are several factors that drive its development. One of them is the Glonass navigation system: “We have big plans with and around Glonass. Only a small portion of these plans have been implemented so far. Anyways, we have numerous examples of Glonass-based applications and it is a growing market. A significant part of the electronic industry is also dealing with metering devices, where we have a number of big players like Energomera or Incotex.” Another important factors supporting industry development are new government legislations, which stimulate local production: “Even though the discussion about the support for local production started some years ago, these ideas still have no real impact on the actual electronic business. That could change in 2-3 years and maybe then global producers will be forced to produce their goods locally.” “Now, for many electronic devices there is no custom duties at all – or it is no problem to avoid these duties – which in turn discourage people to think about local manufacturing.” Recently Evertiq wrote about Motorola bringing parts of its production back to the US. The same trend is observed by Semen Lukachev in Russia: “When customers chose between the Far East and something closer to the end market and their R&D centers, our company is big enough to offer an attractive conditions for component sourcing and volume production. We have 6-7 projects which used to be produced in China, but have come back to
American Battery Metals, U.S. lawmakers convene American Battery Metals Corporation has completed a series of meetings with lawmakers and personnel in the Department of Energy and Department of the Interior in Washington, D.C., to discuss issues critical to the domestic battery production and storage industry.
Cogiscan, Critical Mfg. form strategic partnership Quebec, Canada-based Cogiscan and Critical Manufacturing, headquartered in Portugal, have forged a strategic partnership to deliver smart factory solutions for electronics manufacturers.
Collins Aerospace expanding in North Africa Collins Aerospace Systems, a unit of United Technologies Corp., has taken the first step toward the expansion of its existing site in Casablanca, Morocco.
The advantage of Vantage - Garrett Wong tells the tale Nordson Asymtek's Garrett Wong gives us a rundown of the business year and also details the Vantage Advantage
Sponsored content by Nordson ASYMTEKStart-to-finish conformal coating with reliability and efficiency Nordson ASYMTEK’s flexible, modular, Panorama™ S-Line delivers conformal coating process control in a space-saving footprint with overlapping line processes that minimize manufacturing floor space. This innovative, patent-pending line layout trims 50% of the line’s length by using the lower compartment in each piece of equipment for functional use. Combined with Nordson ASYMTEK’s global support, this complete conformal coating line delivers quality, product reliability, efficiency, and safety for all your conformal coating applications.
Saki’s Eddie Ichiyama details a very successful business year Eddie ichiyama from Saki gave us an update on how 2019 has been for the company and also shared some details on the recent expansion in the Czech Republic.
The ripple effect of Enrico Krog Iversen while being an active part in creating one of the fastest growing robotics companies in modern time might have been enough for most people, that does not seem to have slowed down a certain Danish entrepreneur.
Yamaha's Ichiro Arimoto on the business year and the company's new ventures Evertiq had the opportunity to talk to Ichiro Arimoto, General Manager of Yamaha Motor Europe, about the business year and the company's new ventures.
Mycronic, Indium forge strategic partnership Indium Corporation has announced a strategic partnership with Sweden-based Mycronic, to develop no-clean and water soluble solder pastes for jetting applications.
Sponsored content by EsemdaContract manufacturer Esemda opens new facility in Vilnius and expands EMS The new facility has been built with reserved space for future expansions. As Esemda constantly grows, it is of great importance to be able to rapidly increase production capacity in large volumes.
SCHMID delivers PlasmaLine to Hofstetter PCB SCHMID announced it has installed the company’s first PlasmaLine comprising ICP etch & sputter deposition of its Korean JV SCHMID AVACO at Hofstetter PCB AG in Switzerland.
Cobot market to reach USD 9+ billion by 2025 A new report from Tractica is forecasting continued rapid growth for the global collaborative robot (cobot) market over the next few years, reaching revenue of USD 9.7 billion by 2025.
MixComm scores USD 8+ million in series B round New Jersey-based fabless semiconductor company MixComm has secured USD 8.6 million in series B funding led by existing investor, Kairos Ventures.
SIA elects 2020 leadership The Semiconductor Industry Association (SIA) Board of Directors has elected ON Semiconductor CEO Keith Jackson as its 2020 Chair and Qorvo CEO Robert Bruggeworth as its 2020 Vice Chair.
Si wafer shipments recede for fourth straight quarter Worldwide silicon wafer area shipments slid for the fourth consecutive quarter of 2019, according to the SEMI Silicon Manufacturers Group (SMG) in its most recent quarterly analysis of the industry.
Decline in Q4 DRAM contract prices lessens as buying momentum recovers According to the latest analysis from the DRAMeXchange research division of TrendForce, Q4 DRAM ASP is as of yet undergoing a slight QoQ decline, but this decline has shrunk down to 5%.
Technica forms growth-focused equity fund San Jose-based Technica USA has reached an agreement on an equity investment centered on future growth for the global PCB fab and assembly supplier.
IHS Markit: 5G economy in the trillions by 2035 The IHS Markit 5G Economy Study, commissioned by Qualcomm Technologies Inc., is forecasting that 5G will generate USD 13.2 trillion in sales enablement by 2035.
Sponsored content by SourcengineComponent Aggregators vs E-Commerce Marketplaces What is the difference between electronic component aggregators and a marketplace?
67% of a buyer’s journey is now done digitally. Learn how marketplaces emerged as full-cycle procurement platforms and challenged the traditional component aggregators.
ZEUS Battery partnering with Kruvand Associates ZEUS Battery Products and Texas-based Kruvand Associates Inc. have come to a formal agreement on a collaboration that began in January and covers Texas, Arkansas, Oklahoma, Louisiana, New Mexico, Arizona and Mexico.
EPP with a new owner The company announces that is has found itself an ideal buyer – Photonics Systems Group – a manufacturer of micro-materials processing machines. With this takeover, PSG is strengthening is operations in the electronics industry and also laying the foundation for further growth.
Volkswagen starts pre-production e-mobility plant in China The new plant of the SAIC VOLKSWAGEN joint venture has been completed. It is purely built for the production of all electric vehicles on Volkswagen’s Modular Electric Drive Matrix (MEB).
Kongsberg Maritime divests KM Contros GmbH Following a strategic review, Kongsberg Maritime AS (KM) has decided to divest KM Contros GmbH (Contros) to AML Oceanographic Ltd. (AML).
Sponsored content by NCAB Group Benelux B.V.Failure is not an option for a PCB More than 30% of the Gerbers NCAB Group Benelux B.V. reviews, have problems. However, the PCB are integrated in key end-user product with more and more High Tech PCB. We are here to support you on the new technologies growth to maintain a high reliability and quality. Contact us to review it together.
SUSS MicroTec adjusts outlook for fiscal year 2019 Based on the preliminary figures for the first nine months and the updated budget figures, SUSS MicroTec is substantiating its expectations for incoming orders, sales and earnings for the current fiscal year ending December 31, 2019.
GPV's revenues soars 130% Danish EMS provider, GPV Group, announces that the company generated revenues of DKK 2.2 billion in the first nine months of 2019, a 130% year-on-year improvement driven by the acquisition of Swiss company CCS at the end of 2018.
Former GM plant now Lordstown Motors Corp. General Motors’ shuttered Lordstown plant in Ohio, which closed in March, is now in the hands of an electric truck start-up that is looking to begin production in about a year.Load more news