NO industry is more global than electronics, and the currency factor intensifies the relentless competition Scottish plants face from overseas rivals - sometimes within the same transnational company.
Prestwick Holdings, the Ayrshire-based printed circuit board maker which was rescued in a financial restructuring three years ago, had been promising a buoyant 1998 until a few weeks ago. Suddenly a prospective takeover approach went cold, and trading turned down, as even the best-tuned suppliers to the electronics giants began to feel a draught from the Far East - and in the UK, from the pound.
Just up the road in Kilwinning, a home-grown company which has turned itself into one of Europe's biggest computer industry suppliers is still feeling bullish.
Fullarton Computer Industries, part of the English quoted engineer Laird Group since 1985 but still run by its dynamic entrepreneurial boss Allan McLuckie, is about to open a new plant in Ireland.
Last year it took over David Murray's Mimtec to achieve what it believes is the necessary critical mass in the huge global PC hardware supply market.
McLuckie says: ''If you are not a global company in this sub-contracting business and you don't have a lot of different diversifications and a sizable chequebook, you will be struggling, unless you have a real niche in the market-place.''
This year McLuckie sees a slowdown, with a personal computer price war now emerging as retailers try to shift unsold products from the end of last year. ''There will be destocking, then there is the situation in Asia, then there is the strong pound. A lot of companies are organising themselves for the millennium. Put all these things together and you finish up with a soft market. But after the summer I think we will be really busy, not everybody will be, because it is getting very very competitive.''
FCI, however, is ready to reap the rewards of its long-term strategy. ''The companies which have demonstrated quality, efficiency, pricing and flexibility will be busy. We are looking at a lot of new products for various customers.''
McLuckie says new products are the key. ''They run for about a year or a year and a half, we might do some refreshment on them, modifications on some of the hardware, or cosmetics. We are only as good as our customers decide we are, we have worked hard to win new products from them and we have won our fair share.''
On the acquisition of the Mimtec plants, McLuckie says: ''We have still got a lot of work to do on the acquisition in Dundee, we are making progress, there are a lot of things to change and it takes time. There have been changes in management. At Greenock we are starting to build a training and education facility - that was sadly lacking in the business we took over.''
The #150,000-plus project includes an 80-seater auditorium for presentations to employees, suppliers and customers. The plant in Ireland was commissioned at the end of 1997, it will recruit more than 200 people and will also have a training and education centre.
McLuckie says of the pound's attack: ''We have handled the situation, but we are beginning to feel the draught of it now. A lot of our competitors are actually dealing in dollars, and two years ago the pound was at $1.50 now it is $1.67. It is now starting to bite against us.''
FCI has a long-established plant in North Carolina, where selling in dollars to dollar customers has avoided sterling problems.
McLuckie said: ''Albeit we have competitors in the UK and Europe, our biggest competition is coming from China. There the people work 70 hours, for $14 a week, and they live in the compound in dormitories. Three or four years ago we didn't have this competition.''
He adds: ''The currency is causing problems in the market place for Fullarton because these Far East corporations are selling in dollars.''
McLuckie remains bullish. ''We have positioned ourselves, with the help of the Laird Group and the workforce, to take advantage of the opportunities as we move up to the year 2000 and onwards. I am very optimistic about the future of our business.''
But on the pound he warns: ''We feel strongly that the Government should be taking more ownership rather than passing it to the Bank of England, it should be looking at industry in general which is creating
the jobs and the prosperity.
The pound needs to be managed better.''
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article