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'Value added is Europe's best weapon': interview with Eric Jeanteur, Cire Group (June 2002)
June 28, 2002 |Estimated reading time: 7 minutes
Eric Jeanteur, Cire Group: “Value added is Europe’s best weapon”
In the general storm, France-based Cire Group bends but doesn’t break. For its chairman, Eric Jeanteur, the French and European PCB sector can take precedence over Asia by fighting on its own ground: flexibility, value added, and lower acquisition cost. And—ultimately—alternative technologies.
The following interview with Jeanteur, translated from the original French, was conducted by François Gheysens for Pistes & Pastille magazine.
Pistes & Pastilles: What should we remember of your 2001 fiscal year?
Eric Jeanteur, Cire: The Cire Group realized €80 million sales; this is a decline of two percent with regard to 2000. The year 2000 will remain an atypical year, linked to the rush toward the Internet and mobile telephony, as well as the Y2K transition, which rushed the renewal of materials. It was not a mirage, but manufacturers rushed to what they believed was Eden. We’re returning now to the realities.
To return to 2001, our first half of the year was relatively similar to 2000’s first-half, whereas the second half took the impact of the economic decline, particularly in November. As well, the group was affected by two major events: the slowdown of the telecom market, which especially reached SPCI and SGCI, and then the explosion of the AZF chemical factory of Toulouse, which slowed down Cirep’s takeoff. Cirep’s roof was damaged, but this PCB unit is totally restored from the shock. I should add that we invested more than ten percent of our turnover in equipment. Cocim’s inauguration, on June 6, shows that the Cire Group forges ahead!
How do the first months of 2002 appear?
Year 2002 began in difficult conditions, but while the global PCB market fell 40 percent on average, we are shrinking approximately15 percent. The Cire Group is suffering, but getting out of this honorably.
What are your assets?
The Cire Group benefits first from its position on the strong markets of the economy. Demand remains relatively steady in the consumer (automotive, household appliances) and military segments. This demand compensates, obviously, for the collapse of the telecommunications market in the second half of the year 2001, and for the languidness of the industry market. Then, the group depends on a very wide customer base because we count more than 300 active customers. I should clarify that we gained about a hundred new customers in 2001.
In the first quarter 2002, three big units (Aspocomp, Ruwel, PPE) filed for bankruptcy in the French market. What is your analysis of this real storm?
When the French market gets narrower, it is bad at first for the suppliers who become weaker. We need to rely on their permanence. Then, when the French market offering gets smaller, it incites customers to look toward other horizons. The PCB buyer, as any ordinary consumer, should have the feeling that he has the choice to be sure he buys at a good price. Each of us tends to go to a shopping mall to buy a watch rather than visit the watchmaker just around the corner.
Regarding the factories that closed, they had the ability to produce in big volumes for a few customers, essentially oriented to the phone industry. Thus, they had a weak buyer base, a specialization in telecoms (a little less marked for Ruwel Bayonne), and a positioning in the large production runs that are perfectly mastered in Asia and less expensive there. When the market fell and some big names in telecoms withdrew from the game, I understand that these manufacturers sacrificed their French subsidiaries. One can also wonder: what was the real value-added of these European factories, which competed primarily with the Asian manufacturers? For us, the only possibility of viable development in big production series rests in the alternative technologies: TPC, TMGP, straps …
How can European PCB makers win against Asian competitors?
European customers go to Asia for the price, which we conceive easily for stabilized products. Consequently, what Cire Group offers is based on non-stabilized products and the repair of stabilized products. A printed circuit—it is price, quality and deadline, but also flexibility and problem reductions, if I dare say. To know how to sweep grains of sand that appear in daily life is an important matter.
For new manufacturers, the first-time buyer suspects that some issues connected with quality, the logistics or other risks could inevitably appear. He might also need to modify a track at the last moment. On what specialists could he then bank, and in what period of time? Compared with many Asian manufacturers, Cire is brimming with staff capable of bringing advice and ability to react as requested by the customer. I like to say that Cire is not a manufacturer of printed circuits, but a supplier of solutions.
Does it mean that the battle is lost on the price field?
I have this principle that customers know well how to buy: You just have to name the right price. You should not be mistaken about the right fight: Today, unless the gap between your pricing and Asia’s is more than 20 percent or 30 percent, you do not draw the attention of a buyer! On the other hand, one can gain a deal and still be more expensive than an Asian manufacturer if one proves a strong value-add—one that allows, for example, for reduction of the customer’s acquisition cost by 10 or 15 percent, which is very different from the purchase price. The point we want to make to the buyer is that we offer both a pledge of flexibility and a potential of logistic, qualitative and technological solutions to lower his acquisition cost.
With such competitive advantages, what is the strategy of the Cire Group?
Our strategy consists of deploying ourselves in Europe on commercial and marketing bases by depending on our French production sites. Our primary efforts will target Germany, where demand is four times superior to that in France. Abroad, the group wants to take advantage of its capacity to accompany its customers for the long run. Besides the variety of technologies, the listening or the service, this strategy expresses itself especially by offering permanence—it signifies a financial solidity.
Does the rise in the power of EMS companies cause you particular concern?
No. This kind of customer corresponds perfectly to Cire’s niche in the market: The EMS providers know the PCB less well than traditional customers and are very pressured financially, so they need more solutions to reduce their acquisition cost. We return to my earlier point: In the higher-cost countries, the supplier must generate added value.
What view do you take of the evolution of the world market?
In my opinion, 2001 and 2002 are years of transition, years that pronounce the break between a former and a new world. Henceforth, European buyers will consult European and Asian producers. I want to take this globalization as an opportunity! Practically speaking, to still exist in five years, Cire should become a major actor in Europe.
Interview by François Gheysens
CIRE GROUP INDUSTRIAL ORGANIZATION
2001 Sales : €80 million (-4%)
2000 Sales: €81.5 million (+30%)
1999 Sales: €62.3 million
Cire Group’s professional facilities and their specialties
SITES
Specialization
2001 turnover
Comments on 2001
SPCI
Villeneuve-le-Roi (94)
Models Prototypes
m
SPCI suffered from the decline of the telecom market
CIRETEC
St-Ay (45)
Microwaves Specials Rigid flex Flex
k
Ciretec had a good year, due to strong demand from the military segment and for special PCBs
CIREP
Toulouse (31)
Multilayer Specials (Aerospace industry)
g
Development was slowed down by the explosion of the AZF factory (Toulouse)
PLANTIN
Small series multilayer
k
Plantin made a better run than in 2000
CIREA
Cholet (49)
DSPTH
g
Cirea played the game well, thanks to the automotive market
SGCI
Bellegarde (45)
Multilayer
m
SGCI was affected by the recession of telecommunications sector
-
STH: Silver through holes.
- LCPTH: Low cost plated through holes
- Silver, copper, carbon bridges and shields
- Metallic core on SS, DS and ML (IMS)
- Thick copper with PTH
Commodity facilities and their specialties
SITES
Specialization
2001 turnover
Comments on 2001
BREE
Pithiviers (45)
Small series commodity Insulated metallic substrate Very large dimension PCBs
m
Bree suffered on its SMI products from the decline of the telecoms market
BREE INDUSTRIE
Puiseaux (45)
Copper paste through hole Silver paste through hole 200 µm LCPTH: Low-cost plated through holes
k
Bree Industrie took advantage of strong demand in the automotive sector and the Cire’s breakthrough in the household appliances sector
SIFELMET
Chalon-sur-Saône (71)
Single side Single side with links
k
The same report as for Bree Industrie
COCIM
Boulogne (62)
NPTH Silver paste through hole 250 µm
g
Cocim moved into its new factory at the end of 2001
CIRE GROUP HISTORY
SGCI, based in Bellegarde, was the first company of the Cire Group, in 1970. Today, the CIRE Group is the French PCB leader
1979 SPCI creation 1984 BREE creation 1986 CIRETEC bought back from Thomson 1989 CIREA bought back from Thomson 1991 BREE INDUSTRIE creation 1996 PLANTIN bought back 1997 SIFELMET bought back 1999 CIREP bought back from Thomson 2000 COCIM bought back