Dear Customer,
As 2011 is now well underway, it is about time to give you an update on what is happening at Chemitalic.
Turnover in 2010 grew by a little more than 30 % compared to 2009. We are satisfied with the development (though 2009 is naturally a convenient year to compare to) and we expect continued growth in 2011 in the range 10-15 %.
We continue to focus on offering better (shorter) lead times for prototypes and quick service build. We see great benefits from working with you already from the prototype stage, both when it comes to those lower cost that you can hopefully achieve and through our input to design for manufacturability. We hope you will take advantage of this.
In week 11 we participated at the CPCA exhibition in Shanghai.
In 2011 we will also continue our investments in machinery, first and foremost to expand our capacity and there through achieve a better cost structure, which should benefit both you and us. We need to continue this process in small steps, considering cash flow.
Though focus is on capacity, new investments will also have a positive effect on capability.
We plan to increase capacity for FLEX boards. We get more and more requests for FLEX from our customers and as we, with relative limited investments can start producing more single- and double-sided FLEX boards we are planning to start this up during Q2/Q3.
A side effect from this will be that we will also get more capacity for FLEX-RIGID boards, where we are also seeing an increasing demand.
Look out at the European PCB Industry
Even though we as a European company are located in China, we are, with concern following the development in the European PCB industry. In our opinion it is necessary for European PCB manufacturers to realize that cooperation rather than fierce competition between European manufacturers is the right path forward, considering that the major threat does not come from within, but from outside Europe.
If the industry does not realize this, the movement of PCB production away from Europe will continue, which means that knowledge will continue to transfer and the European Electronics Industry will be more and more (totally) dependent on Asian PCB production.
As mentioned, even though we have our production in China, we still see ourselves as a European company and we hope some healthy PCB production will remain in Europe to the benefit of the Electronics industry in general. Therefore an important part of our future strategy will also be to play our small part in forming alliances in the European PCB industry.
In this context it is also interesting to see how average PCB prices have developed in Europe and Asia in the last 18 months. According to BPA Consulting the average prices in Asia have increased by 43 % (double-sided) and 19 % (4 layers) from Q4 2009 to Q4 2010, while the prices in Europe have remained stable.
This supports what we already know; that prices are increasing in Asia.
For European manufacturers we can naturally consider this positively, as the cost saving from buying in Asia vs. Europe has decreased (though it is naturally still significant).
But it can also be viewed with some concern! As raw material costs have also increased in the last 18 months in Europe, it must mean that the gross margins are disappearing. This will not last for long and at some point manufacturers are forced to increase prices.
This was just a short comment to the current situation in the European PCB market.
We thank you for your continued cooperation and support.
Best regards,
Chemitalic Suzhou Ltd. / Chemitalic Denmark A/S
Steen Svendsen & Palle Morthorst
Attached: New company brochure – we hope you will take a look...link