Bright future for manufacturing, with challenges

I worked in the trucking industry for a long time and for the past three years I have been allowed to call the metal processing industry mine. And although these are obviously two completely different industries, something strikes me. Namely, customers everywhere want the same thing, and that is "value for money. So, contrary to what you might think, they are not always just looking for the very lowest and best price. We work with real entrepreneurs. People who use their creativity to make their business as successful as possible.

Actually, as suppliers, we are not strictly speaking "salespeople," rather we help our customers -in the broadest sense of the word- to solve one or more problems. And that is also where the challenges for small and medium-sized companies lie. Apart from all the new technologies, digitalization and automation and the knowledge required to implement and integrate this properly, such companies are facing a shortage of personnel to get it all done. And at the same time not to lose their competitiveness. 

The result is accelerating consolidation in the market. Either companies are being bought out or they are starting to merge. And as a result, we also see an increasing number of investors emerging in the manufacturing industry, buying up these (newly formed) companies. They increase efficiency by reducing overhead and centralizing revenues. That's how you keep the knowledge and expertise in-house and stay competitive. Because investors not infrequently look at long-term returns. So consolidation, as far as I'm concerned, is essential for the successful future of the industry. Also ideal for attracting good employees, by the way!

The supply, especially toward the near future, is certainly there. In the Netherlands, this is strongly evidenced in the manufacturing industry by ASML. The Veldhoven-based company is at the forefront of innovation in the semiconductor industry. They provide chip manufacturers with the essential tools -hardware, software and services- to use lithography to etch tiny patterns onto silicon wafers, the basis for just about all modern electronics. They are currently growing exponentially, and a lot of our customers are suppliers to ASML. If this continues to grow, we will soon be able to speak of the ASML effect not only in the Netherlands, but also in Belgium and the other European countries surrounding us. ABN-AMRO recently made a study of this. They claim that about half of the machining companies in the Netherlands are currently directly or indirectly related to ASML. 

Finally, another initiative we are currently working very hard on is our now gigantic mountain of data and its processing. This allows us to see very clearly industries where we are doing well and where we are not doing so well. Which are doing very well? The aeronautics, defense and maritime/offshore industries. That's where we see particular movement in the near future. We are already shifting gears....   

The Pen - Jan Fijnaut – Commercial Director at Hoffmann Group