With high reliability markets at the forefront, our insightful guest, Joachim Verhegghe, plant director of ACB Dandermonde, paints a picture of the changing dynamic of the printed circuit board fabrication market. Joachim sheds light on how premium sectors are willing to pay more for locally manufactured products and the potential role of automation in the industry.
PCB@C-Level was generously hosted at productronica 2023 by Adeon technologies - learn more at https://www.adeon.nl
Like every episode of EMS@C-Level, this one was sponsored by global inspection leader Koh Young (https://www.kohyoung.com) and Adaptable Automation Specialist Launchpad.build (https://launchpad.build).
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Speaker 1:
Hello, I'm Philip Stoten, I'm at Productronica 2023 and I'm on the Adion Technologies Board.
Speaker 2:
I'm talking to Joachim Verhegghe. I'm the plant director of ACB Dander Monde. I've been in the industry for eight years, working with the company for eight years as well. I'm plant director for one year and I'm part of a group, acb. I'm the plant director in Belgium, but we have two other facilities in France and then there is a small part in the assembly, the component support. That is a smaller part of the group.
Speaker 1:
Okay, and in all, what's the kind of scale of the group in terms of number of people or revenue?
Speaker 2:
So we do around 40 million now in revenue. Acb Dander Monde is doing around 22, and then in total in Dander Monde we have 120 people and on group level I would say 250.
Speaker 1:
We're hearing a lot of talk at the moment about reshoring of manufacturing generally and opportunities relating to that. Do you see a change in demand? Do you see a change in thoughts from your customers, where they're saying they actually want stuff manufactured here in Europe?
Speaker 2:
We see a huge shift in our business because we are mainly focusing on high reliability markets. So ESA we are also ESA qualified and then the Monde, so we do. We see a huge increase of space demand, but also in the defense business for obvious reasons. So this is demanding a lot of our capacity at the moment and we are in the business now where we need to expand and try to fulfill the demand of our customers. So we see this shift also and the avionics a bit towards Europe again.
Speaker 1:
So it's good for our business, yeah it absolutely is, and you know it's interesting we were talking off camera to someone else earlier and I think there are specific sectors where the reshoring of PCBs is a matter of security and a matter of concern, but there are areas, perhaps in the more commercial area, where it's perhaps not seen as quite as important. Is that the way you see it?
Speaker 2:
That's also the way we hear it from customers and our colleagues as well in the business. So automotive is not doing great at the moment. So a lot of Germany companies are really struggling at the moment. So it's with ups and downs, and in ACB we had a bit of history as well. So we first had the telecom company, then we invented ourselves in avionics, business defense and now space is the new chapter that we write in the last 10 years, which is doing great for us. But it's always a bit reinventing ourselves and push the limit towards a higher reliability and another market segment.
Speaker 1:
And I guess price is an element in that, because those are sectors that traditionally expect to pay a little bit more for their printed circuit boards and are probably prepared to pay a bit of a premium to have them manufactured locally.
Speaker 2:
So the biggest challenge for us is because there are a lot of specifications and demands from our customers. So they ask a lot of flexibility from our side and they pay a price for it as well. But they are willing to pay it because every question they ask we try to fulfill in terms of quality, in terms of documentation, in terms of reliability. So, yeah, that comes with a price, for obvious reasons.
Speaker 1:
So that makes sense and when you look forward, if we see more reshoring of printed circuit board fabrication to Europe and maybe some of the less high reliability or the less sensitive areas stuff, you're going to need to scale and you're going to need to become more competitive. Is automation part of the answer there? Is that taking the labour costs out in terms of significance.
Speaker 2:
It's definitely a part of the strategy in our group to do a bit of automatisation and take the handling away. There's two benefits of that, for sure. The efficiency and throughput is an advantage, but also the manual handling is becoming more crucial and it's always a bigger risk for defects and so on. So in our markets and in our business it's these two things that help us to increase capacity a bit. But it's a bit slightly different than bigger companies with higher volumes, because we have to have a high flexibility, because we have a high mix of technology and products. Also, the quantities are a lot smaller. So it's a bit different in automatisation than the bigger companies.
Speaker 1:
Yes, absolutely. It has to be adaptable, doesn't it? Is that also a way of mitigating problems with talent, because we're hearing in Europe that talent is really hard to get, particularly in the manufacturing industry.
Speaker 2:
Every engineer we have, we need to start from scrap. Luckily for us, they are highly motivated, because PCB application is a highly flexible thing. You have a lot of mechanics, chemical processes, so there is a big variation in our job offer. Let's say so. That is a big advantage for us, so people don't have to be necessarily on the same position for years and do the same thing. But it's true that it's a crucial situation now in terms of having the right hands at the right place. Not only engineers, but also operators are hard to find, especially in Belgium and France, where the employment rate is this high that it's hard to find the people here.
Speaker 1:
Automation can be part of that solution, but it's also a way of upskilling the people you have and making the jobs more interesting and perhaps more sustainable for them. Last question you've been in the industry for a little under a decade. Two decades ago the industry was almost ten times the size that it currently is in Europe. Do you see an opportunity to at least stem that flow and increase the volume of printed circuit boards being made in Europe?
Speaker 2:
We certainly see the demand from our side. So there are some market segments that are growing. Let's say, of course you don't know how long this bubble will last, so you don't have to overreact and say, okay, we will build a new factory. So definitely there is a growing segment for us and we increase capacity on our three factories in the coming years. But it's step by step and the investment rate is also this high because you have a chain of processes with the equipment with high costs. So it's a step by step growth that we try to achieve.
Speaker 1:
You take that incremental approach and you take the opportunities as they come. Continue to success. Thanks so much for talking to me and look forward to chatting in soon. Thank you.