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congatec AG: Nurturing new talent is important to us
congatec has had an excellent year: New office openings in Japan and Australia with their eyes already set on China. No wonder we wanted to have a closer look at such a successful company.
2012 was a real record breaker for congatec. But where do you go from a record year? In terms of overall market share – with a worldwide volume of over USD 600 million – congatec is No 2 in computer modules. In other words, the German computer manufacturer has a market share of around 10%. So there’s room for quite a bit of growth. Christian Eder, Director Marketing at congatec, agrees: "Of course, we want to capture a still bigger piece of the pie. That's definitely our goal. Despite our steady regional expansion, we are not yet represented in all local markets, and this is where we can still acquire some market share." It is the clear product focus that distinguishes congatec from other competitors. The company focuses on the attractive niche market for computer modules. And this is fairing rather well. The market itself is growing and so it is easier to grow alongside. “Our experience shows that the market for computer modules is growing by about 30-35%. If we increase our sales by 30%, then that's not even such a great achievement." Also, there’s still a way to go to catch up with market leader Kontron with a market share of around 15%. The remainder is distributed among countless businesses. The thing with the embedded market is that growth underlies special rules. The computer module market is mainly characterized by organic growth. Acquisitions – whether to increase market share or expertise – make little sense. "Due to our strong specialization there’s not much for us to acquire. With our expertise we are already pretty much at the forefront." This is why congatec focuses on what they do best: development. The sales figures reflect this. "Speaking for ourselves, we also made a loss during the crisis year 2008. However, while we had no real growth, neither did we suffer – with a minus of 3% – a major blow. During an economic crisis, you can almost call this a success. In the following years, we went back to increased growth. This means that projects were simply postponed; we didn’t actually lose any business or projects," says Christian Eder. The target now is a moderate sales growth of 20%. "Why? We are sharpening our knives. We are currently revamping our internal IT systems in order to be prepared for the future. We are also introducing tighter internal processes – growing to around 150 employees, means you also need a more structured workflow." The company's largest market is industrial automation with 40%, followed by medical with 20% and gaming with 17%. The remainder is distributed across smaller areas and, according to Eder, this is precisely where it becomes interesting for the company. There are a number of segments that spell future opportunity: Vending machines, digital signage, transportation and entertainment systems. Especially the transport sector is of interest for congatec. "Most long-haul flights already provide passengers with individual entertainment systems. Short flights lag somewhat behind this development. True, airplanes are not replaced every year, but their interior is renewed perhaps every 8-10 years. And this is where we see retrofit potential. Even if we are not in bed with the actual aircraft manufacturers, the retrofit sector is a large and attractive market for us." But it’s not all plain sailing for congatec: the company finds it hard to recruit qualified staff. Young technology talent has become rare in Germany. "They certainly aren’t queuing at our doors. But we have forged links with local universities and feel these co-operations work well for us. For instance, we always have students from the Deggendorf University of Applied Sciences in our office for interesting projects. One of the last projects was an embedded tablet. It was developed entirely by a student and was a lot of fun. It has become a wonderful demonstrator." The company is increasing its engagement in the region. One of the projects is “Technology for Children”; it was initiated by a member of the congatec board with the aim to inspire and interest children and young people in technology at an early age. The project targets secondary and even primary school children. During afternoon classes pupils get a hands-on introduction to technology. So the kids can solder like mad and also take the odd computer apart. There’s no question that this is a long-term project, and certainly no recruitment fair. However, the region and the country are important for congatec. And if you yourself don’t get involved, then who will? "This is obviously a long term project. Inspiring young people for technology cannot be achieved from one day to the next. But we have observed with pleasure how this program has expanded. It now goes well beyond the local boundaries. As a sponsor, we actively support this success further."
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