© Electronics Production | July 21, 2014

Periscope - new, 'old' name and a beginning

Since mid-June, Flextronics in Paderborn (Germany) is no longer called Flextronics, but Periscope. But what has - except for the name of course - changed? We decided to ask.
First, it must be said that this change came rather by accident. "Flextronics wanted to sell and we had been looking for suitable acquisition opportunities. And both things - luckily - came together", said Markus Roschel, CEO of Periscope GmbH. "We acquired the Selcom group 18 months ago and it was clear from the beginning that we want to continue to grow."

So far so good. But why decide on a German site? High wages and fixed costs make a production rather adventurous it would seem. "Our goal is to build a really nice medium-sized EMS-provider. The fund is German and the German market is important and we wanted to create an industrial base in Germany. This in turn gives us greater access to the market too."

The fact that the production portfolio in Paderborn is focussed on Industrial was also a key factor. "With the Selcom Group we are already active in Industrial and Automotive. However, we have little influence on the German market. With the new production facility here in Paderborn - which is in terms of sales our largest facility - we intend to operate in the German market. We want to establish ourselves as a partner for the mid-sized OEMs. In our business - and of that I am convinced - it is very important that you communicate with each other on equal terms. That does not mean that we do not want to work with international corporations. Quite on the contrary."

However, in the customer portfolio, these large Internationals will only account for a small portion.

Regionality is another important factor for the manager. And he uses an analogy about the brewing business to explain what he means. "Breweries always say, I'm doing my business around the brewing tower. Further than that I will not go, because otherwise I lose my regionality. This can be adapted to our business as well. On a greater scale perhaps, but nonetheless. It can be defined geographically, but partnerships must also work well when it comes to thinking and working."

If we are able to act autonomously and locally again, then we can be very successful here in Paderborn. I'm convinced.

But we are not done with the investments and acquisitions. The portfolio needs further expansion and the manager is focussed primarily on Medical; customers do already exist, but the volume is not really worth speaking of. This will change, however. "If someone wants to sell in the area of ​​Medical, then he should contact us. You may write it just like this." Which we have hereby done.

"Medical is certainly an area that we want to have in our portfolio. But for acquiring such skills, a lot of things must come together. If we could buy it; that would be great. Otherwise, we will grow organically in this area."

But where will Paderborn go from here. Is the site looking into a bright and successful future? Or will it be more adventurous?

"Everything will be bright, I am sure. But we have to work hard. There are not only advantages here. For example, the high personnel costs. But every German location would have the same problems. Furthermore, we are currently not fully utilised to the full here in Paderborn. There is room for much more. The factory is expandable. Previously, the site generated a lot more revenue than it does today. These are realities. Today, Periscope would not be able to stand on its own feet. Many functions are no longer located in Paderborn, but were organised at group level. We gradually work to bring those vital functions back. We are currently bringing back management, IT and customer acquisition."

For the next 6 months, we are therefore occupied with the implementation of an SAP system; an investment of around EUR 3 million. After that, the site should be able to function as a stand-alone again. As a regional mid-sized EMS-provider. The customers will not be adversely affected by this transition; due to the transitional arrangements made with Flextronics. "So we need to switch off and on again." But a positive note, so the manager, Paderborn has already started to book new contracts. A small success and a good sign for the future?

"The hard part starts when we have to generate our own income again. And this - of course - is only possible if we reduce costs and increase revenues. "Possible measures that have to be taken or not ... this is still to early to say. We are still evaluating."

The forecast for the site is still positive. "Today we have a very good customer portfolio here in Paderborn. Now it depends on how we stabilise and expand the portfolio. The level we are at today is insufficient to make the site work. There has to be more. But again - and to make it absolutely clear: if we hadn't seen obvious growth opportunities, we would not have bought the facility in Paderborn."
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