Elcoteq SE, the largest EMS provider with consolidated net sales for 2007 scaling 4 billion euros and current scale manufacturing capacities tantamount to place 5,00,000 components per hour, provides global end-to-end solutions comprising product development services, supply chain management, new product introduction, manufacturing and after-market services for customer products. Focussed on telecom and communications vertical, it is a winner of ELCINA-DUN and Bradstreet awards.
Sukhvinder Kumar, general manager, Elcoteq Electronics India, a subsidiary of Elcoteq SE, speaks to Jesus Milton Rousseau S. of Electronics Bazaar about its success in India and its vision for a glorious future in the Indian market
Friday, March 20, 2009: EB: How is Elcoteq positioned in the EMS business market in India currently? How does it plan to sustain itself here?
Elcoteq was the first international EMS provider focused on communications technology to announce its intentions of setting up a high-volume manufacturing facility and operating in India in 2005. Our unique operational model and services bring consistency, flexibility and expeditiousness to our customers. Our global positioning and years of industry experience succour us in providing our services globally and also drive our customers’ success. Most of our long-term key global customers as well as new clients require manufacturing and localisation. To this end, Elcoteq has heightened volume manufacturing of plug-in units and box build solutions for mobile base stations and broadened supply chain management in India.
Our Bengaluru facility is suitably located to boost export opportunities in the Middle East, the Persian triangle and east Africa. Elcoteq can act as a gateway for original equipment manufacturers (OEMs) in India as we can partner with other countries to be a one-stop destination for all their service needs, right from board and system assembly to full turnkey supply chain and engineering services. Our facilities in India facilitate our global clientele’s entry into the country and help us strengthen our existing relationships with them, as well as spawn new business opportunities in their markets. Elcoteq’s experiential knowhow and on ground proficiency can help OEMs to gain technological competence, sourcing expertise, global footprint, design support and asset management in the communications technology market in India. This will enable OEMs to focus on their differentiators such as product innovation, brand image and product sales, which are vital to secure when penetrating a new market segment.
EB:What are the advantages and disadvantages of manufacturing in India?
Owing to the adept engineers, software developers, designers and a highly skilled workforce with global-quality standards, the manufacture of telecommunications equipment in India will have a positive cost impact on the end customer. Furthermore, India is home to a growing market for handset OEMs and EMS providers, which make for viable business opportunities. However, there are still infrastructural issues related to road networks, high capacity data links and reliable power supply. There is scope for improvement in the EMS industry, which needs to endeavour a better competitive supply chain for electronics components in India and establish competitive duty and tariff structures. Despite these shortcomings, India’s progress has continued. It is likely to become a significant base for companies planning to set up industries in the near future. India is expected to account for more than 10 per cent of the global electronics market by 2015 and the Indian electronic hardware market is projected to increase from the existent $35-40 billion by the year 2010.
EB: Are government policies helpful in India?
We have ventured into the Indian market at the opportune moment when the Indian government was encouraging local telecommunications manufacturing. The government sees telecom growth as a major driver for overall economic growth of the country. As furtherance, it has put together a series of incentives to create a competitive business environment and has also set up special benefit schemes like special economic zones and electronic hardware technology parks. Both the Central and state governments have supported us at various levels. We have received advice and guidance from software technology parks of India, the department of information technology, biotechnology, science and technology, government of Karnataka and the department of telecommunications.
India has already proved its skills in software and hardware design, which can be readily employed to feed the telecom industry. Other motivating factors for firms contemplating setting up local operations are the Indian government’s agenda, ambitious growth plans for telecommunications and the favourable regulatory environment it has created regarding patents, copyright, data protection, etc.
EB:What are the challenges encountered in your business? Have you been able to overcome them?
The challenges we face are akin to any that tend to crop up whenever a new service or product is being launched into a developing market. The overall industry will evolve, leading to greater competition, competitive costs and establishment of a supply chain cluster requisite to meet the needs for components and ancillaries. This headway will benefit the industry as a whole.
Elcoteq will continue to collaborate with various government departments and share exemplary practices and expertise of global markets at work. Elcoteq has the first-mover advantage in the industry and we will serve as catalysts for the development of hardware manufacturing in India. Our global scale amplification and market leadership enable us to develop products more efficiently at competitive costs. We at Elcoteq deliver more value to our customers and to their consumers through globally consistent plant network, standardised machinery and uniform systems and processes, contributing to superior time-to-market and transferable skills, technologies, products, assets and human resources of global standards.
EB: What was the turning point in your business?
Elcoteq enhanced its position in 2006, based on customer requirements by providing them with complete solutions. In 2007, it became a supplier to the worldwide interoperability for microwave access (WiMAX) wireless broadband market and started business with WiMAX-based product suppliers.
EB: Which countries do you export to?
We have a global supply chain network and manufacturing facilities which are close to customers’ end-markets. For example, facilities with volume manufacturing are in Brazil, China, India, Mexico, Hungary, Estonia, Romania and Russia. Other offices are in Hong Kong, Korea, Japan, Finland, Switzerland and the Americas. Our products are exported to different regions across the globe as semi-finished or finished products, depending on the customers’ requisitions.
EB: What are Elcoteq’s future plans?
The Indian market is rife with opportunities enough for every major player. The market size is feasible for building equipment locally, making way for great opportunities, not only for equipment manufacturers but also for components and parts vendors, as well as research and development centres. We intend to maintain our competitive edge and retrench total cost of ownership for our customers to take forward our Indian chapter.
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine