Western Europe remains competitive as a location for volume manufacturing despite the impact low labour cost areas such as China have had on the market, according to a senior executive at Solectron.

Despite the global trend which has seen so much volume manufacturing move to lower cost areas in the Far East, Hamid Halfaoui, v-p of European operations for global manufacturer Solectron, told Electronics Weekly that its European facilities have been adapted to be competitive and the situation was more stable than five years ago.

“The global economic trend is there, but customers see that we can add value by manufacturing in the West,” said Halfaoui.

Solectron’s site at Dunfermline specialises in work for local tier two telecoms firms, industrial and aerospace customers. “We also manufacture in Dunfermline a set-top box which the customer sells around the world,” said Halfaoui.

Hamid Halfaoui

“Of course, manufacturing has moved east to make it cheaper, but this is not true for all products,” said Halfaoui.

According to Halfauoi, customers now take into consideration a number of issues which affect overall product cost. These include product quality and on time delivery.

“Labour costs are just the tip of the iceberg, if you miss on any of the cost elements you cannot satisfy the customer,” said Halfaoui.

Solectron has 11 manufacturing sites in Europe, including two in the UK at Dunfermline and Manchester. “Last year Europe generated $1.5bn worth of business for us,” said Halfaoui.

Another factor is that Asian companies selling product into the European market are increasingly likely to look for a local manufacturer.

“The supply base may be in the Far East but Asia companies have approached use to manufacturer in Europe,” said Halfaoui.

www.solectron.com