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Electronics Buyers' Guide

Electronics Manufacturing & Production Handbook 2019


 

Ad Valorem excise duties - a blessing or a potential curse?
11 May 2011, Manufacturing / Production Technology, Hardware & Services, News

Job creation has become the key focus for our current administration and, if our astute journalists have it right, the life blood to the success or failure of such administration.

So other than giving the IDC nine billion Rand to distribute to existing organisations to grow or create sustainable employment, we can apply duties to products that can be made locally. A case in point: TV panels and potentially now monitors, attached to their enticing global brands and promise of ludicrous volumes. The industry is now abuzz and the loophole seems to have been closed by including certain monitors when applying the duty. So how will tariff code 8471 or 8528 without rebate 460.16/85.28 affect PCBA and ultimately job creation?

I think, first and foremost, we need to understand that margins will be dictated to the industry and not the other way around, and yes, the volumes should justify the subservient position we will have to adopt – as many of us have already experienced. As for our ‘dear federation,’ what strategic direction have they adopted to protect and consolidate our minor industry against the bullying might of the global power houses?

At the risk of sounding like promoting price fixing, surely we should have some open debate on what is sustainable and how we can ensure growth and not decline. To protect our local industry and historical client base, we must view this opportunity as new investment; to this end, how are we to ensure continuity without long-term forecasts or future orders to warrant the investments in both machinery and skills? It cannot be tackled to the detriment of local customers and their supply must be seen as additional as opposed to core, to meet this end. So I ask again what the industry is doing to position itself for battle against this ever increasing juxtaposition of immediate opportunity and potential future threat.

The answer, unfortunately, is nothing but fragmenting even further into weaker positions through panicked pricing that will prove to be parasitic to the core of the business, affecting not only the manufacturer but its client base. There are some manufacturers that have unfortunately already travelled this road without many options to return. Please understand that I am by no means looking at this as a negative move by government and I do believe that we as an industry have been handed a key to the global door, I just believe that we need to use it to open that door and not turn it the wrong way, thereby breaking it in the lock and leaving it permanently inaccessible.

What is the answer then? How then do we maximise this opportunity, to firstly create sanity in the form of agreeable margin, but secondly and more importantly to create societal wealth in the form of sustainable jobs and industry growth? It goes without saying that we manufacturers should be standing together – the volume requirements could swamp every machine available and still be short. Secondly, we should have some strategy on how to invest wisely as we are creating livelihoods, but primarily I must protect the 300 families who already rely on us and the existing customers that ensure such reliance. The only way forward, in my humble opinion, is a marriage between manufacturer and brand. Our vows would be to quality and investment in resources, skills and the standards they require, and their vows should be ones of time and commitment, nicely tied up in a prenuptial agreement that will ultimately protect the 300 families referred to above.

Our labour is organised, they have their bargaining council and main agreement dictating industry negotiated terms and ultimately protecting them. Maybe (and yes, this is said tongue in cheek) we should have our own main agreement with the global brands that ultimately will protect us.

Perhaps we can learn from one of the biggest global players, if not the biggest, Foxconn, a unit of Taiwan’s Hon Hai Precision Industry Co., the world’s largest contract electronics maker by revenue, who said in a statement recently that its net loss for the 12 months ended 31 December 2010 totalled $218,3 million, compared with a net profit of $38,6 million in the previous year. Revenue fell 8,2% to $6,63 billion from $7,21 billion a year earlier (source: The Wall Street Journal – digital network, business earnings.)

“We need to take decisive actions to conclude our capacity relocation, optimise our cost structure and return to profitability. We need to serve our existing customers better and approach more new customers,” Foxconn Chairman Samuel Chin said in one statement. The company earlier announced plans to move its main production base to Langfang, in northern China’s Hebei province, to mitigate rising labour costs.

If the giants of our industry in one of the most efficient and cost friendly operating environments in the world is struggling to supply the major brands profitably, we must make sure we are prepared when entering the ring to fight in what we all have to agree is way above our current weight division. As a final word of support to my fellow manufacturers, be strong in negotiation, be resolute on fairness but more importantly protect your resources, because the global heavyweights will utilise every last placement today with no promise of tomorrow.

For more information contact Jason Wilford, Microtronix, +27 (0)11 792 5322, jason@microtronix.co.za, www.microtronix.co.za


Credit(s)
Supplied By: Microtronix Manufacturing
Tel: +27 11 792 5322/3
Fax: 086 645 3955
Email: info@microtronix.co.za
www: www.microtronix.co.za
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Further reading:

  • Things are tough for electronics contract manufacturers in SA
    23 October 2019, Barracuda Holdings, Leratadima Tellumat Manufacturing, Manufacturing / Production Technology, Hardware & Services
    The contract manufacturing side of the South African electronics industry has been under enormous pressure for some time now, with some high-profile manufacturers having closed their doors or suffering serious financial trouble in recent years.
  • Quality management based on quality assurance
    23 October 2019, Quamba Technologies, Manufacturing / Production Technology, Hardware & Services
    To ensure consistently high product quality and ultimately achieve a zero-fault production stage, it is necessary to control all process steps.
  • 3D printing and electronics manufacturing
    23 October 2019, Omnigo, Manufacturing / Production Technology, Hardware & Services
    “The opportunities are endless and we are excited to see what the future holds for 3D printing and the electronics manufacturing industry.” – Christine Brindle, Omnigo
  • 3D printer for rapid prototyping
    23 October 2019, RS Components (SA), Manufacturing / Production Technology, Hardware & Services
    RS Components is shipping the latest version of the MakerBot 3D printer – the MakerBot Method – which has been designed to bridge the gap between industrial and desktop 3D printing. The unit targets engineers ...
  • Versatile conformal coating applicators
    23 October 2019, Techmet , Manufacturing / Production Technology, Hardware & Services
    The Select Coat applicator series from Nordson Asymtek – which includes the SC-350 Select Spray and the SC-300 Multi-Mode – is a highly versatile conformal coating applicator that supports a wide range ...
  • High-accuracy fluid dispenser
    23 October 2019, Techmet , Manufacturing / Production Technology, Hardware & Services
    Nordson Asymtek recently introduced the Forte fluid dispensing system. The Forte series combines high-accuracy fluid dispensing with increased throughput and productivity in a narrow footprint to handle ...
  • Conformal coating cleaning agent
    23 October 2019, Techmet , Manufacturing / Production Technology, Hardware & Services
    Coating carriers and frames offer important advantages within the conformal coating process regarding handling, process reliability and output, but they also require very extensive cleaning afterwards.  ...
  • Company profile: Etion Create
    23 October 2019, ETION Create, Manufacturing / Production Technology, Hardware & Services
    Etion Create is an original design manufacturer (ODM) that has been in operation for more than 25 years. Originally known as Parsec, the company was founded in 1993, focusing on the design, development ...
  • Cleaning machines and agents on show at Productronica
    23 October 2019, Electronic Industry Supplies, Manufacturing / Production Technology, Hardware & Services
    Using the motto ‘Make the Cleaning Check’, Zestron will be exhibiting a selection of state-of-the-art cleaning machines from leading international manufacturers. Visitors who are looking for a new cleaning ...
  • Application centres for dispensing and coating
    23 October 2019, MyKay Tronics, Manufacturing / Production Technology, Hardware & Services
    With a larger global installed base of MYSmart and MY700 jet printing and dispensing systems, Mycronic is taking the next step in bringing its hands-on expertise closer to customers by establishing multiple ...
  • Hensoldt merges its SA subsidiaries
    25 September 2019, News
    The company has merged its two South African subsidiaries, GEW Technologies and Hensoldt Optronics South Africa, into the consolidated Hensoldt South Africa brand.
  • Q&A with iPulse Systems
    25 September 2019, iPulse Systems, News
    We asked Gary Chalmers, the CEO of local developer and manufacturer iPulse Systems, to tell us what new and exciting technologies the company has been working on lately.

 
 
         
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