CIE SEPT09 P6:Layout 1 07/09/2009 11:07 Page 6
Front End l Recession Watch
Stay cool under pressure
John Roe, Managing
Director of Micronel UK
Ltd, explains to CIE why
the Swiss fan and blower
specialist took the decision
to go ahead and invest in
a dedicated UK facility in
spite of the current
economic conditions
T
his time last year the mainstream
news media had been full of
sensational stories about the
credit crunch and economic downturn
because what had started in the
financial world had spread to
construction, automotive and then to
retail and services. Many of us in the
UK Electronic Component Supply
industry were somewhat bemused with
the early breaking news coverage
because unlike some of these other
sectors our industry had been having a
tough time since 2002 (let’s face it the
good years were when the market Distributors, whether they are large operations or widening their linecards as part of an insurance scheme which
grew by a meagre few percent) – our broadliners or smaller Independents and Micronel felt that the best way to can then be requested when assistance
industry hadn’t had much help from may be unable or unwilling to take this deliver real value and service to our is needed. This also means that our
the market, our growth had to be necessary longer term approach on customers and provide fast and core skilled workforce that has been
achieved by new products, new their own. effective local support was to take built up over many years is not lost
initiatives and old fashioned hard work. The UK manufacturing landscape has control and shape our own UK during a short to medium term
September 2008 was however a game been shifting for some time and with it operation with the right know-how downturn.
changer – it became very apparent the UK component supply chain. The and experience. Outside of Production we have
that this downturn would be different first big shift in the 1990s was the At Micronel the cost of setting up a expanded our R&D team and this year
given the additional impact on outsourcing of volume manufacturing UK operation has to be measured Micronel will launch more new
Government debt, stock markets, to contract manufacturing – these against the cost of not supporting our products than in any other single year.
global banks and pound sterling CEM’s were well served by broadline key customer groups. Micronel is a not Our new generation blowers have the
exchange rates. It was also about this distribution but the broadline approach untypical family owned “Mittelstand” highest pressure and airflow
time that Micronel had to make a go can be somewhat commodity based company (German/Austrian/Swiss combination from the smallest sizes
or no-go decision to set up a UK and specialist products such as SME) and as such can behave available on the market. We believe
facility. We decided that the market Micronel’s are not always serviced that differently to a PLC. We were fortunate that customers that can weather the
dynamics had actually made it even well. The next big shift was off-shoring in that having had several years of current storm will also have to start
more important for us to go ahead which left the remaining UK good growth we could not only “fix looking at new product development
with setting up Micronel UK for a manufacturing base as smaller, more the roof when the sun was shining” and innovations and our new
number of keys reasons. specialised and more fragmented. The but we could also set aside funds for generations of products will meet the
Even before the recent economic customers remaining are usually investment in new products and key upcoming needs of the next 3-5 years
events Micronel had been thinking of involved in smaller batch production markets such as the UK. For Micronel of product designs. For instance whilst
changing our go-to-market strategy for and project work and are often harder the issue is not one of credit-crunch our traditional automotive business is
the UK in order to become closer to to serve through traditional sales but more one of driving sales. At in the doldrums we do have many live
our customers and key markets. methods. The small and medium sized present the UK represents a small projects for using blowers in fuel cell
Micronel products are used in high customers want to be able to percentage of global business but applications which will come to fruition
performance applications where the download data when needed and then future UK growth will help decrease in the coming years. The quid pro quo
fan or blower is a critical component - call in higher level technical support at the reliance on German and US of long design cycles is that product
such as medical, mil-aero, automotive, the right time during a live project. business and also help with overall lifecycles are reasonably good in our
personal protection, laboratory or Available options with specialist geographic balance. Micronel has not applications – the hard work and
process control. The UK market has a Distribution are also very limited for been immune and has seen reduced investment is at the front end.
strong heartbeat of activity in these Micronel’s type of product and this has demand from many countries and have Recovery when it comes will be
sectors but the product design cycles also been compounded by many had to scale back some production modest, slow and lumpy, more likely to
are often long and the designs are specialist Emech Distributors being accordingly. Medical has been largely be W shaped than L or V and certainly
often application specific (80% of acquired by the bigger groups. unaffected but other areas such as will not be easy. The bottom line for
Micronel turnover comes from German Automotive have definitely Micronel is that the UK will remain an
products that are in some way A much wider change process suffered. Our Swiss factory does important market and that companies
modified to a specific application The current downturn is really the benefit from being able to reduce that continue to invest in new products
whether it is bearing, impeller, motor, most recent and dramatic seismic shift working hours for production staff and being close to UK customers will
lubricant, cabling, control etc). in this much wider change process but without losing people by virtue of the succeed and emerge stronger. And
Micronel need to support these diverse it also polarised Micronel thinking. Swiss government scheme that who knows – there may even be a
projects and need to be able to take a Although Broadline, Specialist and subsidises short time working during return to wider interest and focus for
long term view through these adverse Catalogue distribution all have a place, economic cycles. The company and manufacturing in the UK one day....n
economic cycles. Third party many Distributors are scaling back their individuals pay into this fund monthly
6 September 2009 Components in Electronics www.cieonline.co.uk
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