Update on the European EMS Industry
By Dieter Weiss, in4ma
We have seen a few EMS rankings lately, some with what I consider inaccurate and misleading methodologies. I was asked by the German EMS industry to apply my analytical approach to provide insights about what is going on in Europe.
Let us look at European EMS companies and their position globally. The TOP five are no surprise to anybody in this industry: Zollner by far the biggest EMS in Europe. Asteelflash, Scanfil, Videoton and Enics follow him.
Now come the surprises, as few watch Italy. Italy is not only the country of pizza and spaghetti; they have 114 EMS companies and are rated No. 7 in production revenue in Europe. With Bitron Electronics Division, they have a global EMS player among them (www.bitronelectronics.com), with factories in Italy, Poland, China and Mexico. With annual revenues of 370 Mil. Euro in 2018 Bitron takes the No. 7 position behind Neways.
The funny thing about it: One does not even find Bitron on the list of the world’s biggest EMS companies, even though it should be there in position No. 44. This would unfortunately kick Kitron off the global TOP 50 EMS companies list. Do not panic Kitron, there is another company on that list, which in my opinion does not belong there at all, and that could keep you on in position No. 50.
In position No. 8 to 10 as usual the French companies: Allcircuits, Eolane and Lacroix. Well done, our French friends, you are reliable in growth and revenues. Position 11 to 14 have been there before as well: Fideltronik at 11, Kitron at 12, Melecs at 13 and TQ Systems at 14.
in position No. 15 another surprise from Italy to some of you: Elemaster (www.elemastergroup.com), another EMS with a global footprint. They acquired CAD-UL in Germany a couple of years ago and have a solid place into the biggest European EMS market in Germany, which had an EMS production value of more than 6.7 Billion Euro in 2018.
German BMK with factories in Germany, the Czech Republic and Israel is in position No. 16, Cicor Group, which has improved a lot under the leadership of Alexander Hagemann is at No. 17. Now some problems arise due to the definition of EMS. In my opinion, the Dutch Prodrive Technologies are an EMS and therefore go in Position No. 18. Connect Group AG from Belgium are at No 19.
No. 20 is again an Italian surprise, but this one is questionable. It is the Italian System Group, whose main business is ceramics (www.system-group.it). They have an Electronics Division with 285 Mil. Euro in revenues as well, but they build their own products in addition to EMS. I rate them only with 50% of their revenues for EMS, which still gets them before Note in position No. 21. This is an assumption I have no problem making, so Note is in position No. 20, as they are 100% EMS.
You are missing TT Electronics plus Stadium, Leesys and Hanza, which were named in another ranking about four weeks ago? I only take TT’s integrated manufacturing services for the ranking, which gets them below No. 25. Leesys is in my ranking for Germany only in position No. 30. The majority of products manufactured is the same as when they were a Siemens factory. Just changing the name and declaring oneself an EMS does not make you one. I only take a certain percentage of their revenues for the ranking. Hanza for sure is a big Swedish company, but doing electro-mechanics and mechanics for the majority of their work. If I took all of their revenues for the ranking, then I would have to include the ceramics business from the Italian System Group as well (which would push them up to the TOP 5) but that makes no sense. Ranking needs to follow clearly defined rules and the companies must be carefully and consistently analyzed.
Now let us look into the future. By year end 2018, the Danish GPV Group had acquired CCS from Switzerland. This was a big move and should bring GPV to No. 11 of the European EMS companies. If they target a position in the TOP 10, they need to do better than Lacroix or Eolane.
In January, the purchase of ETL Elektrotechnik Lauter GmbH in Germany by the German Katek SE was closed. Katek already has factories in Grassau/D, Györ/H, Memmningen/D (Steca GmbH) and Saedinenie/BG (Steca Bulgaria). The combined revenues of these factories brings them to a theoretical position No. 15.
However, let us be realistic. We are just in 2019, there are still eight months in front of us and the carousel of mergers and acquisitions is picking up speed in Europe. Let us wait and see what the remaining months bring us. I do not believe the negative predictions for the EMS industry. We had a very good 2018 and if growth rates in 2019 slow down, it is not a recession. Instead, it is the right time to convince OEMs to let their products be manufactured by qualified EMS companies.
Join me on May 8 at the Electronics of Tomorrow (www.eot.dk) conference and exhibition in Herning, Denmark or listen to my presentation about structure and strategy of the European EMS industry.