EMS@C-LEVEL

Electronica 24: Insights from C-MAC's Journey in a Shifting Global Landscape with CEO Riwan Tamic

• Philip Spagnoli Stoten

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Riwan Tamic, CEO from C-MAC joins us at the IPC booth during Electronica 2024 to share insights into the world of electronic manufacturing services. From its humble beginnings in 1986, C-MAC has grown into a medium-sized player in the  industry, known for its high-reliability solutions across automotive, aerospace, and medical fields. Riwan and I explore how the company is navigating geopolitical hurdles, tariffs, and trade wars while maintaining agility and expanding its global footprint in regions like Belgium, the UK, and Canada. As Riwan sheds light on their strategies, we  gain valuable perspectives on keeping competitive in a rapidly shifting market.

Learn how C-MAC leverages automation and AI to enhance efficiency and predictive maintenance amidst varying labor rates in different countries. Riwan discusses the current state of overcapacity in electronic manufacturing and how C-MAC is positioning itself to better serve its clients in this challenging economic climate. 

With a focus on cost competitiveness and staying close to customers, this conversation unveils the challenges and innovations shaping the future of EMS. Join us for a compelling discussion that captures the essence of C-MAC's journey and their vision for the future.

EMS@C-Level at electronica 2024 was hosted by IPC (https://www.ipc.org/)

EMS@C-Level is sponsored by global inspection leaders Koh Young (https://www.kohyoung.com) and Creative Electron (https://creativeelectron.com)

You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.

Philip Stoten:

Hello, I'm Philip Stoughton. I am an electronica 2024 on the IPC booth and I'm joined by Rowan from CMAQ. Great to see you again. I think last time we chatted it was in Poland. That's correct, philip? That was the first time we talked. So, for the sake of our audience, just start with a quick introduction to you and the CMAQ business.

Riwan Tamic:

Yes, absolutely, I'll do that. So first of all, thank you for giving me the time and the opportunity to tell a little bit about CMAQ. So CMAQ is an EMS company electronic manufacturing. We are a medium-sized company about 300 people. It's a range of 70 to 80 million euro revenue and we have three sites across the world one in Belgium, one in UK, one in Canada. We are a little bit specialized in the sense that we do a lot of solutions that go to reliability systems.

Riwan Tamic:

It could be for automotive defense aerospace, a lot of also industrial and medical applications. We are building a lot of our solutions on ceramic substrates which provide high reliability when it goes to temperature, high current, humidity and things like that. But we are also providing actually standard solutions based on PCBA so we can offer both solutions to our customers.

Philip Stoten:

Okay, so a broad range of solutions and an interesting footprint as that footprint, where did the company start?

Riwan Tamic:

Yeah, so the company started in 1986. I won't give you the full story of the company, but CIMAC was at some point a large EMS company. At the early 2000s it was actually serving a lot of telecom business, got into a little bit of trouble, was sold to Selectron and what I'm running today is actually the core of CMAQ from that time. So interesting footprint and we are also working on extending that footprint for the near future to continue to bring solutions to our customers.

Philip Stoten:

Yeah, I think one of the things that we learned from last week's presidential elections in the US is that geopolitical challenges will continue for some time. We're in a world where tariffs are becoming more important, trade wars are becoming more challenging, protectionism is becoming more likely. For an EMS company, that means thinking about two things your footprint and your agility Correct. How does CMAC meet that challenge?

Riwan Tamic:

Yeah, so I mean in terms of proximity to our customers, this is where we play a role today. So if it goes with our footprint in Europe being closer to the automotive customers or to the different aerospace, same goes for Canada, which are still, as of today, kind of a good entry to the US market. So this is why we are playing that role where we need to.

Riwan Tamic:

Let's say improve the footprint of the company is, for example, to benefit about, let's say, better cost positions, and that's one of the reasons why we met actually in Poland not too long ago and we are doing the same on the North America side so to see how we can improve our footprint to better serve customers in a way.

Philip Stoten:

So when you look at the current or the government that will be in the US, like many, you're waiting to see whether they're going to put tariffs on near neighbors as well as distant countries.

Riwan Tamic:

Yes, I would agree with that. But on the other side, what we have seen, actually, let's say starting this year, like there is a large overcapacity right at the moment in the electronic manufacturing. We also see that our customers are I will not say again, but they are very careful into pricing, if I can say it like that. So cost matters a lot, it always matters. So cost matters a lot, it always matters. But we are coming from, let's say, a time where actually capacity was limited in the industry, especially looking for components, but now it's a little bit the opposite. So I understand the tariff. I'm not thinking it will protect, let's say, western European industry enough that we can just sit back and relax. So we still have to look for best cost options for our customers.

Philip Stoten:

Yeah. And when you think about being more competitive and you think about being more competitive in countries like the UK, where labor rates are high, like Canada, where maybe the labor rates were in the middle, yeah yeah, is automation a big part of that. And when you think about automation, do you think about the application of AI, maybe within that?

Riwan Tamic:

Yes, so we are thinking about that. I could give you some examples in AI that we use for maintenance, for example predictive maintenance. But when it goes to automation, this is where actually CMAQ is, let's say, operating in kind of medium range of volumes, let's say from the thousand to the million, just to give you an idea, and when we go close to the millions, this is where we can bring actually good sophisticated automated solutions and this is where we can compete actually with from Canada, for example, with countries like Mexico, Because in fact we are able to reduce labor costs so drastically that we are becoming still competitive against that. For UK, the observation is correct. Also, let's say, incidentally, the labor cost of the UK is not that high compared to other Western European countries, but in UK we have kind of, let's say, decided and keep our local-to-local strategy, so we're really serving the local market from a local manufacturing site.

Philip Stoten:

Yeah, that's become more critical post-Brexit. It feels like a slightly more isolated market than it perhaps was before.

Riwan Tamic:

And we've seen that, to be honest, at least for the past two years. Now it's getting challenged a little bit because again we need to look at offering better cost solutions. So UK market is being a little bit challenged at the moment, like other markets.

Philip Stoten:

So you tell me about your geographical footprint. From a point of view of your facilities. Where are your customers mainly based? Same footprint or North America?

Riwan Tamic:

Yeah. So if you look at our customers, I believe it's around 30% to 35% in Germany, and that has to do maybe I forgot to do that that CMAQ is actually an automotive industry. That could sound bad, but it's actually not so bad when you offer, let's say, tailor solution to your customers. So our customers are mainly in Germany about a good third. We have also about 25% in France and that's for defense, aerospace, which is quite strong over there, but also automotive, and we have also around 20% of our customer being North America-based and US-based. Incidentally, we are delivering, let's say, products from Canada to Mexico for US-based customers. Okay, yeah.

Philip Stoten:

Okay and last question what are your predictions, projections, hopes and fears for 2025? Is it all? Bets are off at the moment.

Riwan Tamic:

Well, we've been quite optimistic for 2024. So we are. Cimac has been growing very fast for the past two years, in the range of 30% every year, so we've been doing quite well. This year, a little bit of optimism that was actually, let's say, a stop with the market trend, but we are still in very good shape. For next year, we are actually predicting to be back on the growth side, and it's not only actually to, let's say, optimism, but it's also linked to a business award that we got recently.

Riwan Tamic:

You can still, let's say, outperform in a little bit of a depressed market if you've been able actually to attract the correct solution from your customers, and this is what's happening to us In automotive. I could say that we have a lot of solutions where we deliver standard combustion engines, but we have also gained actually, let's say, solutions for electric cars, and this comes actually, even if it's not at the level expected for us. It's coming on top of the volumes we have at the moment. So this comes actually, even if it's not at the level expected for us, it's coming on top of the volumes we have at the moment. So I mean we have a little bit of optimism for 2025. I believe the first half will be maybe a little bit difficult.

Philip Stoten:

Yeah, a little bit similar to now, but we'll get out of that.

Riwan Tamic:

I'm pretty sure At some point people will need to buy cars again. Defense Aerospace is doing quite strong. Medical it's another of our markets is actually very steady still, so we have good hope for next year.

Philip Stoten:

Yeah and absolutely. When you look at the underlying trends for electronics and more and more products, ems continues to be a good business.

Riwan Tamic:

It will grow. It will grow anyway. So it's all about timing.

Philip Stoten:

Exactly. Thank you so much for your time Pleasure to chat.

Riwan Tamic:

I appreciate it a lot and I look forward to next time, thank you.

Philip Stoten:

Thank you so much.