September 3, 2007
An abundance of skilled labor, 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).
Electronics manufacturers in UMENA 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 electronics manufacturing services (EMS) providers in the region. As a result, the region is becoming an increasingly attractive hub for the manufacture of cost-competitive electronic products.
New analysis from Frost & Sullivan, Emergence of Ukraine, Middle East and North Africa as an Electronic Manufacturing Hub, finds that the market earned revenues of $425.35 million in 2006 and estimates this to reach $1071.9 million in 2013.
“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,” notes Frost & Sullivan research analyst Ganesh Muthiah. “In the light of these developments, the combination of low-cost, skilled labor and strategically located manufacturing clusters is making UMENA a promising manufacturing base for both OEMs and EMS providers.”
Subsidies and tax incentives offered by UMENA governments to attract foreign direct investment, the presence of global production networks and a favorable manufacturing environment in the region have started a paradigm shift, causing 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.
“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,” adds Ganesh. “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.”
Source: Frost & Sullivan
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