CMs expand services with acquisitions
By Staff -- Purchasing, 10/18/2001 2:00:00 AM
As the outsourcing trend took off last year, the top 50 contract manufacturers made key acquisitions that expanded their design, manufacturing and repair services. In many instances, acquisitions gave EMS companies added engineering design, printed circuit board assembly, backplane and system assembly facilities in Asia, Europe and the U.S.
To keep up with explosive demand, many EMS companies also expanded or opened new facilities to increase manufacturing capacity. MSL, for example, either expanded or opened new facilities in Mt. Prospect, Ill., Lowell and Westford, Mass., Shenzhen, China, Galway, Ireland and Tarragona, Spain. Pemstar established operations in Texas, Brazil, Ireland and Japan. Mid-South Industries opened a new N.C. facility and USI established offices in Calif., China and Japan. Varian purchased two facilities in Calif. and Venture Manufacturing added facilities in Mexico and the U.S.
Other CMs formed alliances. Nam Tai, for example, established a joint venture battery pack assembly business with Toshiba. Sanmina announced an arrangement with Siemens, whereby the company will acquire 49.9% ownership of INBOARD, a subsidiary of Siemens. INBOARD manufactures complex printed circuit boards.
Consolidation is still under way in 2001. Sanmina announced its acquisition of SCI, ranked number four in 2000. In August, Solectron announced it would acquire Canadian-based C-MAC, ranked number nine, in a stock transaction.
Strong demand from networking and telecommunications
industries drove the Top 50 CMs to increase their combined sales by $35.6 billion. The Top 15 EMS companies are billion-dollar club members.
Consolidation thrives
| EMS Company | Acquired operations |
| 1. ACT Manufacturing | Leicester, England manufacturing business of Fisher Rosemount Systems. |
| 2. Benchmark | MSI, Manassas, Va. |
| 3. Celestica | IBM's Rochester, MN ECAT operation; IBM's Santa Palomba and Vimercate, Italy PCB & system assembly services manufacturing operations; NEC Corp.'s Brazilian communication network equipment manufacturing facility; Bull Electronics Inc., Lowell, Mass. |
| 4. C-MAC | A-Plus Mfg, Corp.; G.H.Z. Technologies Inc.; T.Q.F. Technology Inc.; Nortel Network's integrity engineering, product assurance testing & other design-related functions facility; Invotronics Mfg.; Kavlico Corp. |
| 5. Elcoteq Network | ABB Substation Automation Oy, Vaasa, Finland facility; Stephan Elektronik, Germany; Nokia Display Products' PC Display plant in Pecs, Hungary. |
| 6. Flextronics | JIT Holdings Ltd.; Chatham Technologies Inc.; Lightning Metal Specialties and related entities; Palo Alto Products International Pte. Ltd.; The DII Group Inc. |
| 7. Insilco Technologies | Precision Cable Manufacturing Co., Rockwell, Texas; T.A.T. Technology, Montreal, Canada |
| 8. Jabil | Marconi Communications |
| 9. Kimball Electronics | Manufacturing assets of Alcatel in Poznan, Poland |
| 10. Mid-South | Select Tool, Dayton, Ohio |
| 11. Nam Tai | LCD panel manufacturer JIC |
| 12. Pemstar | Turtle Mountain Corp., Dunseith, N.D. |
| 13. Plexus | Qtron and e2E |
| 14. Sanmina | Interworks, Orange County, Calif.; HADCO Corp., Salem, N.H.; Essex AB, Sweden and Finland; Alcatel enclosure Facility, Clinton, N.J.; PCB operations of Harris, San Antonio, Texas; Lucent & Avaya Messaging Systems Integration & Fulfillment operations, San Jose, Calif.; Nortel Networks Wireless & Enterprise Design Services Operations, San Jose, Calif.; Ocean Ltd., Shenzhen, Guang, China |
| 15. SCI Systems | EOG Inc, Hunt Valley, Md.; Telrad Networks Ltd., Ma'a lot, Israel facility; ERG telecom manufacturing facilities in Perth, Australia and Belgium; CMS Hartzell Inc., Lexington, Ky.; Nokia's Multimedia Development Group, Motala, Sweden |
| 16. SMTC | Pensar Corp., Appleton, Wis. and Qualtron, Mass. And Ireland |
| 17. Solectron | Ericsson's telecom infrastructure equipment operations in Longuenesse, France and Ostersund, Sweden; Alcatel's Manufacturing assets, Aguadilla, P.R.; Americom Wireless Services; four Nortel Network's manufacturing facilities in Canada, N.C., Mexico and Wales. IBM's manufacturing operations in Brazil; two Nortel Networks manufacturing facilities in France and Northern Ireland; Nortel Networks manufacturing & repair operation in Turkey; Bluegum Group, Sydney, Australia; Nortel ECAD facilities in Calif., N.C. and Canada; Sony Nakaniida Corp. in Miyagi Prefecture, Japan; Sony Industries, Taiwan |
| 18. Synnex | Mitac U.K. |
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