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Interview: W. Doerflinger (AT&S): "AT&S has become the largest European PCB manufacturer" (April)
March 23, 2000 |Estimated reading time: 4 minutes
Willibald DörflingerChairman of the board of directors of Austria Technologie & Systemtechnik
"AT&S has become the largest European PCB manufacturer" In terms of growth and technology, AT&S is perhaps one of the most brilliant printed circuit board manufacturers in Europe today. And that could be good news for the future improvement of the European PCB industry. But then, telecom helps, says Willibald Dörflinger, chairman of the board of directors of Austria Technologie & Systemtechnik. Today you can find an AT&S PCB in at least every fourth cellular phone. Created just six years ago, how did AT&S become the largest European PCB manufacturer with the highest growth rate in the European PCB industry?
1994 was the year where the already existing, state-owned AT&S was privatized. We just dedicated the company mostly to the telecom industry, and it happened to be the fastest growing sector. On top of that, the telecom manufacturers started to be very demanding in terms of technology and volume. To be able to respond turned out to be a major challenge for AT&S. We had to make the investment decisions to keep pace with this growing market. And it was clear that we had to choose external growth to expand our production capacity, so we bought Indal Electronics in India and Altec in Germany. Several weeks ago, we started operations in our second plant in Hinterberg, which is the most modern PCB plant in Europe, built with a 140 Meuros investment. Our production is already enjoying full capacity. We can't sustain our growth without acquisitions: our target is +40% this year. That's one of the reasons we are now looking for acquisitions and/or partnerships in the U.S. and in China. The other reasons are proximity to the customers and the end markets. That's especially true for the U.S. today, but it will also be true for China in the future. The market there has a tremendous potential for growth, and we want to be part of it. It's the same with India.
Why did you choose to build the new plant in Austria?
When we made the choice for the investment, it was clear from the beginning that we would stay in Austria. High technology production means also the need for synergies between plants and the need for qualified and motivated people. That's what we have here with our already existing plants in Hinterberg-Leoben-by mid-2001, we will have 60 laser drilling machines here and a very qualified work force. (This latter is one of the main ingredients of our success.) We could have gone to another country with cheaper salaries and even higher financial incentives. But it just didn't make sense for us at this point of time. We have our plant in India which produces high-technology PCBs-which, by the way, is highly profitable. We export roughly 50% of its production output, mainly to Europe. And we have plans to expand the Nanjangud site, where there are still 100,000 m2 open space.
How important is the telecom market for you today?
We have outstanding partnerships with our main partners, Nokia and Siemens. These partnerships are based on mutual trust and common research and development activities. And we have good customer relationships with Ericsson, Motorola, Kapsch and others. We have just signed a special purchase agreement with Ericsson amounting to orders worth 9 Meuros this year. With Siemens, we have now an ambitious agreement to supply 40% of their PCB needs for cellular phones. This agreement is worth some 218 Meuros over the next three years.
"We work for people" isn't just our slogan; we live it daily. Today, telecom accounts for some 60% of our turnover; 40% of this comes only through cellular phones. That's a high percentage-which may make us look too dependent, but you have to view this market not only as a mass market but also as a market which is growing in quality. Today's cellular phones will have almost nothing in common with tomorrow's "communication machines." As to growth, we have 500 million people using cellular phones today, but there will be, predictably, five times that many in the year 2010!
Is a position among the top ten PCB manufacturers one of your targets?
AT&S has become the largest European PCB manufacturer. But that was actually never our priority. Position is one thing; customer satisfaction, optimal service and technology are another. We want to be best in class, and we want to become a technology leader not a follower. That's it. To reduce the still existing technology gap between Europe and Japan, we created the R&D initiative, "Austria Technologie Plattform" last summer. There, we work mostly with material suppliers to continuously reduce the size of the printed circuit board.
What is your feeling when you see other PCB manufacturers like Viasystems move into electronics manufacturing, or electronics manufacturers like Flextronics move into PCB manufacturing?
They made their decisions. But, frankly, we at AT&S are so busy with our own future that we don't look very much at the competition. We are focused on our own projects and have neither the spare time nor the resources to analyze the direction taken by other PCB manufacturers.
Willibald DörflingerChairman of the board of directors of Austria Technologie & Systemtechnik