Manufacturing in Eastern Europe
by Carsten Barth, Elcoteq blog
Feb 21, 2008
According to a recent report by Frost & Sullivan, the electronics manufacturing services (EMS) market in Eastern Europe will grow from about $9 billion in 2006 to nearly $24 billion in 2013*. This is not a surprise. Eastern Europe has a culture and infrastructure conducive to volume manufacturing and EMS companies have been established there for many years.
Elcoteq selected Estonia for its first manufacturing plant in Eastern Europe in 1992. There are now more than 2,500 people in that plant, while their Hungary plant in Pecs opened in 1998 and now has more than 6,700 people.
They opened a manufacturing plant in St. Petersburg, Russia in 1997 and acquired a plant in Romania in 2006. All Elcoteq's plants manufacture high tech, communications technology products such as mobile phones, base stations, and networking equipment, but other EMS companies operating in these countries are also answering the demand for a variety of high tech products.
The foremost driver of manufacturing in Eastern Europe is demand from both inside and outside for high quality products produced cost-efficiently, especially as cost pressures continue to drive the market. Companies want to manufacture where they can see good yields and high productivity. Eastern Europe has good availability of skilled labor, flexible employment policies and contracts, good cooperation with customs and other authorities, and a high degree of professionalism. As a company that's operated manufacturing plants in Eastern Europe for over ten years, Elcoteq has gained considerable knowledge and experience in manufacturing high tech products, and has evolved with the market and its new technologies. This includes the development of highly skilled manufacturing techniques, incorporating lean manufacturing and Six Sigma, and having the latest automated manufacturing and test equipment. Operations are on a global scale, so adherence to international compliance regulations and operations benefit from Elcoteq's global supply chain and focus on design for manufacture and examination of total cost of ownership. With continued investments into this area, Frost & Sullivan's predictions seem on target.
*Electronics manufacturing grows in Eastern Europe, James Carbone, Purchasing, July 14, 2007
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