EMS@C-LEVEL
As Forbes, Entrepreneur, Fast Company and SCOOP writer, Philip Stoten, continues to talk to EMS (Electronic Manufacturing Services) executives he learns more about their individual and collective experiences and their expectations for their own businesses and for the entire electronic manufacturing industry.
EMS@C-LEVEL
Electronica 24: A Glimpse into Asteelflash's Innovative Future with Nicolas Denis and Dragan Persic
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Nicolas Denis, the CEO of Asteelflash Group, and Dragan Persic, GM of their Tunisia facility, share the strategic pivots and forward-thinking measures guiding this global French-based EMS company through a challenging 2024. Despite a dip from 2023’s record-breaking revenues, Nicolas and Dragan remain optimistic for 2025, bolstered by emerging business prospects and investments in technology and manufacturing.
Their insightful discussion, with host EMSNOW’s Eric Miscoll, provides a look into how Asteelflash leverages its robust presence in Europe with expansion into Tunisia, Poland, and China to remain competitive. You’ll gain valuable perspectives on how strategic resilience and adaptability are key to navigating industry fluctuations.
Nicolas and Dragan predict market recovery and growth by the latter half of 2025. Although the upcoming year may start on a challenging note, hear why both leaders hold a confident belief in a marketplace resurgence, attributing this to the groundwork laid in previous years. From balancing automation with skilled manual work to meeting diverse customer needs, the discussion is packed with actionable insights for staying ahead in an evolving market landscape. Tune in to understand why they believe the tide will soon turn, promising a brighter future for Asteelflash Group and the entire industry.
EMS@C-Level at electronica 2024 was hosted by IPC (https://www.ipc.org/)
EMS@C-Level is hosted by global inspection leaders Koh Young (https://www.kohyoung.com) and Global Electronics Association (https://www.electronics.org)
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Greetings, welcome, shofar, here in Electronica 2024. I'm Eric Nussel with EMS. Now I have the pleasure today of speaking to two gentlemen from Askew Flash global, large global French-based EMS company. We have Nicolas, the CEO, and we have Dagan, who runs the Tunisia facility, which we had the pleasure of visiting earlier this year. And so, before we get to Tunisia and that story, nicolas Astio Flash, tell us about your company. How's it going here as we're ending 2024?
Speaker 2Well, 2024 has been a challenging year. We had done a record revenue in 2023. That was a $1 billion revenue, but unfortunately the market is weak this year, so we're going down, but we have good prospects for 2025. We want a lot of new businesses that are ramping up right now and so we see growth again in 2025. We want a lot of new businesses that are ramping up right now.
Speaker 1And so we see growth again in 2025. Good, and your footprint remains healthy too.
Speaker 2The way you're spread in the global footprint. Yeah, we have a global footprint with 17 worldwide, 14 of which are in Europe. We come to Tunisia as part of Europe, which are in Europe. We count Tunisia as part of Europe EMEA, right, and yeah, what we see now is we have more and more bigger businesses coming to us, so the bigger factories like Tunisia, poland, china, are growing more than the other ones.
Speaker 1That's good, the only thing you're missing. There is the United States just saying but that's, we have been. Yeah, we've got a factory in Tijuana In Tijuana, that's right, I forgot, that's right. I have not been to the one in Tijuana, but next time I'm down in Mexico I'll have to make sure to go see that. Dagan, tunisia. We had a great visit and tour earlier this year. We had the pleasure of coming into your facility. Yeah, was very impressed by what we saw. How's it developing down?
Speaker 3there. Well, business-wise, I would say if there is one word to define it, it's resilience, because we actually we didn't most of the business are going down, you know, by 10, 20% now. Most of the business are going down by 10, 20% now For us, globally speaking, because of our strategy, where we have a lot of customers. We didn't go down. We're even going slightly, I would say slightly up flat, and that's good. Actually, we are good with flat this year. We accept that Next year probably is going to be similar, maybe going up in the second semester. But then after that we did work a lot to have new customers coming in, also developing the existing ones. So I hope that, and I'm quite confident, in 2026 to 2028.
Speaker 32028 will probably catch up all our business plan that we were discussing about the first time you came, and also in terms of factory layout, everything. I think you will again see a lot of changes if you come again, because we are constantly evolving, investing a lot in the new machines, everything. So, as you already saw, you might think when you go to Tunisia that you will see some old stuff, everything. So, as you already saw, you might think when you go to Tunisia that you will see some old stuff and everything. Actually, we only buy high-end stuff. So, yeah, we try to copy what's happening in China, mexico, everywhere, right?
Speaker 3So keeping in touch with the technology, let's say, and also in terms of EMEA globally, because I have two jobs, like all of us in Astrid, but not two salaries, two jobs as an EMEA operations director. So now we are creating something that I really liked in my previous companies a long time ago. It's what is called advanced manufacturing engineering, so that we can put some R on the process, some research on the process, to be ahead for the processes, for the future, so that we can propose to our customers some technologies that maybe they are not thinking about Because we deal with all the sectors. Even in Tunisia if you just check Tunisia we deal with a lot of different sectors of industry, so we have a lot of technologies to master. So when one customer, when they come, they probably don't know about other technologies. So this is where we want to stress our people, to be more proficient and to help them.
Speaker 1Yeah, and that's really the difference. Still, everybody talks about automation and that helps the labor force, but it really does come down to the knowledge of the people and the experience of the people. Still, I mean, everybody can have the same equipment and perform differently.
Speaker 3Exactly, and you remember when we were discussing in Tunisia. For us and this is a culture personally, and I think Nicolae also we want to pass the culture to our people that the know-how is important. Which kind of machine Machine? You can always buy a machine, it's not a problem. What is your state of mind? How do you learn Every day? You have to learn. If you don't learn every day, you are losing something actually. So, yeah, we are trying to do some kind of how to say balance between full automatization and manual work and everything, because manual is not bad actually. You just need to know what you're doing, how you do it.
Speaker 2Automation is not possible for a very low volume. We have a unique positioning on the market in the sense that we can do high volume, low mix. We can do high mix, low volume. In the sense that we can do high volume, low mix, we can do high mix, low volume. We accept high mix, low volume even for bigger customers which have a long trail of SKUs that have low volume and they need to have the manufacturers still, and we pride ourselves on providing this service as well. But for that we cannot automate everything you cannot.
Speaker 1You know. It's interesting In the tour last week in Romania somebody one of the factory managers said he says you know, a factory is like a living organism, it's always moving. Maybe the SMT lines you don't move, but all the other activities around that and that's what impressed me when I was in Tunisia too just the flow, and that gets reconfigured depending on the business, the volume Even the SMT lines get reconfigured depending on the business, the volume, even the SMT line gets reconfigured.
Speaker 2That's what I was about to say we are working on that a lot Because, depending on the product mix you have, you may want to configure lines with less modules to improve the overall output. And the mix of products is constantly evolving as you embark new customers, as some products go on the flight, and so you need factory to rethink from time to time the optimal SMT setup so that you are overall as possible.
Speaker 3Every six months we check the configuration.
Speaker 1I remember you said that that's right.
Speaker 3Yeah, we check that, and now nearly in most of the factories in EMEA we are starting to check it, so we will spread this everywhere.
Speaker 1Okay, that philosophy, that's a good thing?
Speaker 3Yes, because it's important. It's important for us, for the customers, optimizing the capacities, optimizing the prices. Also, Maybe not always customers maybe not always see this like a cost down, but still you must remind yourself that the cost of salaries, the cost of energy is going up. So if we cannot, how to say, improve our operations and balance this and, how to say, amortize this cost somehow, then we don't go back and say we need to increase the price because cost of energy went up. We never did it actually, or we did it when it's really a crazy, crazy high and you cannot keep up, let's say, let's sell them.
Speaker 1It's been trying a few years in the industry. How are customers holding up? I mean, you deal with customers all the time. It indicated you're winning some programs, but I bet you there have been some difficult conversations over the last few years, right, but these relationships are still very sticky, right. They want to work closely with you yeah.
Speaker 2I think we've had momentum with our business. We're seeing this in our medical case. We are struggling. Many companies, even big companies, are struggling with cash and are struggling with low demand research. They are really questioning themselves on the future products they want to develop. I've seen competition from China in the European market, so overall, some of our customers are not in so good shape.
Speaker 1No, but that's just a matter of that. Demand return. Everybody is waiting. It's difficult times actually for everybody.
Speaker 3Maybe only military industries are going well yeah, that's true, but everything else is yeah. We see, usually our customers are seeing what's 20, 30% less revenue than previously. Some of them also took a COVID period as a growth. That's a mistake, probably for most of them. Maybe coming back to something more just before COVID would be good.
Speaker 1Yeah, and you can't compare to the COVID years. That was crazy Right.
Speaker 3That was just. It has to be treated as some kind of Exactly right.
Speaker 1Specific phenomenon Exactly right. You know I've noticed on Tunisia. We did, of course, a report on that Even this week. I've heard from two who said that they've come down and looked at Tunisia. Are you seeing other EMS more activity down there now? Yeah, I mean from other players who aren't there.
Speaker 3Some new players are installing their factories in Tunisia. Electronics is not just EMS in Tunisia, you have also big OEMs that are over there. Oems that are over there Now. Just now we have some kind of commission in Tunisia to talk with the government how to improve the support for the electronic industry in Tunisia. I believe that Tunisia is, in terms of North Africa, I think they are the most advanced in terms of electronics. Then you have Morocco, probably for mechanics. But now I think everything will balance. You cannot.
Speaker 3Tunisia the advantage of Tunisia, it's a small country, it's a big advantage. There are a million people. You have very good engineering schools that are very how to say, very close to the I would say nearly the same as good engineering schools there that are very how to say, very close to the I would say nearly the same as French engineering schools. So technical guys are having the same education as European guys. So it's very easy, I mean to adapt to work and they can adapt even to European markets. They can do any market and actually what's important there with Tunisia is that all this together, small country even. Sometimes I hear, oh, it's unstable, blah, blah, blah. Nothing is unstable In Tunisia. You give them five billion of health every year. Tunisia lives five billion.
Speaker 1I don't, that's nothing, and you just had an election that settled and everything is moving forward.
Speaker 3I mean, it's really, it's a country that we should push.
Speaker 1We should applaud yeah and use it like, as we always say, we want Tunisia to be a Mexico. What Mexico is to the USA, yeah, but Mexico to USA. But the labor cost advantage in Mexico has gone away, whereas Tunisia you still have that here. So be careful what you ask for.
Speaker 3Well, you know that. Anyway, it's unavoidable that the salaries go up at some point. That's right.
Speaker 1Nothing stays low cost forever.
Speaker 3You're working on being productive, yeah.
Predictions for Market Recovery and Optimism
Speaker 1Listen. Before we end here, any final thoughts looking forward. You said that it's tough. Now I think you're pretty optimistic about the business coming back and future products deals that you're winning.
Speaker 2I hope we're at the bottom of the curve now. I think we will see the half of 2025. Q1 is going to be a bit weak still. I think everybody sees it already it's not degrading anymore. That's the good news yeah, it's not degrading anymore.
Speaker 1That's the good news.
Speaker 2Yeah, it's built to be sick in consumers that the market will pick up.
Speaker 1Yeah, and that's what I generally hear too. People are saying 2020 and then 26,. They're expecting it even more right, so it should be already Right. Well, I wish you continued success. We watch you with great interest and we hope to stay in touch. Thank you both very much.