KATEK expected to reach its first milestone in five years -- it took less than three. In the third video in this series, KATEK CEO Ranier Koppitz explains the reason for speed and the next steps in KATEK's evolution.
The EMS provider’s initial strategy was to reach sales of more than $500 million to ensure it had a seat at the table when manufacturing contracts were being explored by larger European OEMs. Scale was also important to ensure the necessary buying power to be competitive. This buying power has proved to be even more important given recent supply chain issues.
When components are in short supply, suppliers and distributors give preference to their largest and/or most strategic customers. Volume makes customers more important to vendors. At the same time, no supply chain partner wants to be too dependent on a single source or customer.
KATEK, which reached its goal ahead of schedule, took the company to market via an IPO. Management decided to maintain its momentum, focusing on growth and acquisition that would solidify the company’s position in Europe as one of the top EMS providers in the region. KATEK is planning for additional acquisitions that will expand its geographical reach and technology offerings.
Europe’s electronic manufacturing services market is projected to attain a CAGR of more than 5 percent and will reach $110 billion by 2026, according to Global Market Insights. Major automotive manufacturers in Europe, such as BMW, Ford, Hyundai, and Renault, are collaborating with EMS providers for PCBA manufacturing, engineering, prototyping, and designing for efficient development in connected vehicle technology. In January 2020, Fiat Chrysler Automobiles (FCA) along with Foxconn announced the establishment of a joint venture for the manufacturing and development of electric vehicles for the China market.
Several initiatives by the European Union to accelerate the production of electric vehicles, electronic lighting, and safety electronic equipment are the major drivers for EMS expansion in the region.
The next installment will focus on KATEK's ambition to become a global provider of electronics manufacturing services.