Expansion of electronics manufacture across UMENA region
Pilz Automation Ltd
Posted to News on 6th Sep 2007, 20:45

Expansion of electronics manufacture across UMENA region

According to a new report from Frost & Sullivan, an abundance of skilled labour, the proximity to Western Europe, a conducive manufacturing environment, surging economies and growing local markets are propelling the growth of the electronics manufacturing industry across the Ukraine, Middle East and North Africa (UMENA).

Expansion of electronics manufacture across UMENA region

Electronics manufacturers in the UMENA region face major obstacles, including inadequate infrastructure and an underdeveloped component supplier base. However, strategic initiatives - including ensuring the effective flow of goods and services, and the building of a reliable supplier base - are having a positive impact on providers of electronics manufacturing services (EMS) in the region. As a result, the region is becoming increasingly attractive for the manufacture of cost-competitive electronic products.

Frost & Sullivan's research report, Emergence of Ukraine, Middle East and North Africa as an Electronic Manufacturing Hub, finds that the market earned revenues of $425.35million in 2006 and estimates this to reach $1071.9million in 2013.

Ganesh Muthiah, a Frost & Sullivan Research Analyst, comments: "Rapidly fluctuating consumer demands are pressuring OEMs to seek new avenues to justify their production strategies and satisfy demands, just as falling consumer electronics prices are negatively affecting their profit margins, compelling them to seek out cost-effective outsourcing solutions. In the light of these developments, the combination of low-cost, skilled labour and strategically located manufacturing clusters is making UMENA a promising manufacturing base for both OEMs and EMS providers."

Relocation reasons

Subsidies and tax incentives offered by UMENA governments to attract foreign direct investment, the presence of global production networks, and a favourable manufacturing environment in the region are causing sections of the electronics manufacturing industry to relocate to UMENA. Cutting-edge technology and state-of-the-art research facilities, coupled with the setting-up of technology parks, are promoting the region as an emerging low-cost electronics manufacturing hub in the global market.

However, the ineffective flow of goods and services across the region poses a major threat to market development. At the same time, an underdeveloped component supplier base presents a potential risk that could negatively affect industry expansion.

Ganesh states: "Most countries in the region lag behind when it comes to putting in place channels for the streamlined flow of goods and services, delaying products from reaching the market on time. In addition, the success of a supply chain is heavily dependent on the easy procurement of basic supplies for the electronics industry, underlining the importance of having a reliable supplier base in the region."

The Key to maximise available growth opportunities in UMENA is to build up the infrastructure base, as well as to provide support to the electronics manufacturing industry. At the same time, efforts should be made to create a strong supply chain to meet present and future needs.

The report, Emergence of Ukraine, Middle East and North Africa as an Electronic Manufacturing Hub is part of the Surface Mount Technologies Growth Partnership Service from Frost & Sullivan, which also includes research in the following markets: European Contract Electronics Manufacturing (CEM); Industry Value Chain Analysis; Growth of Eastern Europe as an Electronics Manufacturing Services (EMS) Hub; and World EMS Provider and ODM Convergence Markets.

Frost & Sullivan

4, Grosvenor Gardens

+44 (0)20 7343 8383

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