EMSNOW Executive Interview: HANZA Group CEO Erik Stenfors
HANZA’s mission is to “modernize and streamline the manufacturing industry.” They aim to do this through shorter lead times with more environmentally friendly processes and increased profitability for clients by bringing together different manufacturing technologies locally. Founded in 2008, HANZA today has an annual revenue of 2.3 billion SEK and operates in Sweden, Germany, Finland, Estonia, Poland, Czech Republic and China. Among HANZA’s clients are leading companies such as ABB, Epiroc, Getinge, Saab Defense och Siemens. We caught up with HANZA’s CEO Erik Stenfors to get an update.
EMSNOW: Congratulations on your recent acquisition of the German based EMS companyRitter Elektronik. What is your vision for this new addition to the HANZA family?
Thank you very much. We’re excited at the massive opportunity ahead of us by entering the German market, the fourth-largest economy in the world. Germany suites our business model well because companies there, like in Sweden and elsewhere in the world, need to be more efficient to stay competitive while also reducing their environmental impact. By acquiring Ritter, we gain access to a new customer market while also strengthening our manufacturing cluster in Central Europe with more capabilities.
EMSNOW:HANZA appears to be expanding from its previous strong focus on mechanical manufacturing services to more electronic manufacturing. What is the motivation for this?
HANZA is a one-stop-shop concept, including both mechanics, electronics, cable harnesses and assembly – a complete offering. We can manufacture customer products, small and large, in one of our manufacturing clusters from start to finish. We recently acquired a sheet metal company in Sweden that increased our ability within mechanics. This acquisition broadens our group abilities and balances the mix a bit more. Many of our customers need support with mechanics and electronics so having a broad range of skills is crucial.
EMSNOW: Your current geographic footprint now includes facilities in six European countries plus a facility in China? Is your plan to maintain this primarily European focus or is there consideration for expanding into other regions as well?
There are long-term plans and ideas for further expansion in other regions, however this is to be determined later. Our footprint is determined by the needs of our customers. We have a huge opportunity to grow with our customers in Europe, especially now with our entry into Germany. This will keep us plenty busy for now.
EMSNOW: HANZA describes itself as a young company seeking to modernize the manufacturing industry. Based on your management team’s extensive experience in this industry, what are the industry dynamics you seek to change/modernize?
Many product owners today have unintentionally built up very complex supply-chains with a lot of transportation, many suppliers, long lead times etc. By producing products locally, close to the customers’ end markets, you can increase efficiency, shorten lead times, create attractive prices and also reduce the environmental impact with less transportation. Automation and efficiency are key when producing locally so we are able to pass on those benefits to our customers.
EMSNOW: HANZA utilizes a manufacturing cluster strategy. Please explain how these work and what is included in the clusters? Are the clusters geographically limited or are they crafted to serve a customer’s requirements across your footprint? What are the benefits to your customers?
The manufacturing clusters are tailor-made industrial parks, designed to serve customers who want to have a new manufacturing solution. The locations are selected to be either close to the customer, or to the end customer. By reducing shipments and combining manufacturing technologies in one company – instead of a full supply-chain – the customers enjoy lower costs, higher flexibility, and a reduced environmental impact.
EMSNOW: Please tell us about your advisory services and how those function and differentiate you in the industry? How does this service help your customers?
As mentioned earlier, many customers have realized that they have built up a complex supply-chains. Our advisory service was launched a few years back to help customers analyze their manufacturing- and supply-chain strategy and come up with small, precise proposals to improve efficiency and reduce cost. There are other management consultancy companies that can perform these analyses, but we also offer to execute the proposal if the customer wishes. This is quite unique today.
EMSNOW: Where do you see the opportunities for growth in the EMS industry and how is HANZA positioning itself to address these?
We see incredible growth potential in both broadening our capability to support across the full lifecycle of a product – including advisory services – and by taking on a larger responsibility with our customer regardless of what industry there are in. Most customers want to buy more than one solution or product from their suppliers, so more and more will seek strategic business partners who can handle more of the responsibility. We see the market growth coming from complete product manufacturing rather than pure EMS. The acquisitions we make position us to benefit from this trend.
EMSNOW: What issues do you expect to be the most challenging for HANZA and the EMS industry in the next few years?
We can add value to all industries, but we need to take it step by step. Not all companies can be HANZA customers at the same time. We need to grow in an orderly way, and we are doing that in part by the acquisitions we make. We need to recruit world-class people and constantly run education programs in our HANZA academy.
We see a trend that many customers are starting to evaluate moving production back to Europe from Asia as they start evaluating more of the total cost of manufacturing instead of part prices.
Driving greater efficiency and reducing the environmental impact is critical for the industry and many companies are starting to understand this. Turning to suppliers who are closer to their home markets and can support them with a range of abilities helps reduce transportation, which saves time and money, but also reduces CO2 emissions. It’s encouraging to see the industry move in this direction.
EMSNOW: Is there anything else you would like to say to the EMSNOW readers?
It’s an exciting time for HANZA. We have grown over the past ten years to annual sales over 2.3 billion SEK. Companies can see the world changing and understand they need to take action to find new ways to run efficiently, improve quality and do their part to reduce their impact on the environment. We see these global trends happening and have shaped HANZA to be ready to support companies. It’s an exciting time for HANZA and we are optimistic about the huge potential there is out there for us to continue growing over the next decade in Europe, and eventually in the rest of the world.