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At the recent productronica 2015 event in Munich, Germany, I interviewed Kiril Yanneff, CEO of Bulgaria-based EMS firm Tremol SMD about the electronics manufacturing landscape in east Europe and his outlook for the industry. He also spoke about the significance of automating production lines.
Stephen Las Marias: For those who may not be familiar, please tell us more about your company Tremol SMD.
Kiril Yanneff: We are an EMS company based in Bulgaria. We are a part of a group of companies under Tremol Group, which is an OEM company. We decided to have a different business activity as an EMS company. Currently, the company has 200 people—the EMS part; we have all the major electronics assembly processes in place: SMT, THT assembly, manual assembly, box-build assembly, all the quality processes, AOI, in-circuit testing. We have around 40 people involved in manual box-build assemblies.
Bulgaria is still a low-level cost country, so we can provide quite good prices when we have low-volume high-mix products, and also some manual assembly processes. So this is our major focus. So far, the business is okay; Bulgaria is growing a little bit. And we are growing as a company.
Las Marias: Please discuss your markets.
Yanneff: We have around 22-23% automotive; but we are too small to be a first-tier supplier to the automotive industry. The biggest share is industrial, which is around 40%. We have small-volume military and medical markets—we supply to the Bulgarian army and the Greek army; and the rest is consumer electronics.
Las Marias: One of the trends happening now in the electronics manufacturing industry is automation. What is your comment on that?
Yanneff: You cannot go far without automation. The main advantages of that are minimizing human error and you get as much control of the process as possible. So this is the main issue with automation. It gives you, first, stable process, and then minimizing human error, and then it gives you a feedback in each working bench, if you will, to provide you more control of your processes.
Las Marias: Which regional markets do you cater to?
Yanneff: Germany and Switzerland mainly. We are sending products to other continents, but of course our major market is Europe. And it's obvious, because we cannot beat Asian competitors. But if you don't have millions to produce, only tens of thousands or hundreds of thousands, then we are quite a good substitute.
During the global economic downturn, we had quite a growth as a company as OEMs started to produce less volume because of the shrinking market. So when you have to produce tens of thousands, with the transport and the scrap rate, China was not an option. So we had quite a bit of customers who transferred their production from China to us due to that reason. And they stayed, because they found that our prices are competitive, the control is very easy, and everything is two hours away by air. So for us, the crisis was kind of positive.
Las Marias: What is your outlook for your industry?
Yanneff: Well, everything is growing up in scale. How fast? Still I think that everyone is a bit conscious about how the markets will respond; everyone is in a hurry on the other hand because they want to get that market share. So definitely things are going up; we can see it through our customers' orders. It depends on different markets, of course, but all the markets are growing. If we talk particularly about the EMS part, and let's say the east European market, I think that it is also growing because during the crisis, we have proven to be a reliable partner, to be a competitive partner, and I don't see any obstacles for this to not happen.
Because I am part of the east European market, I can say that everything is on the up: Bulgaria is growing, Romania, Serbia, Macedonia; I hope everything will continue.
Las Marias: Great, thank you Kiril.
Yanneff: Thank you Stephen.