In today’s unpredictable geopolitical landscape, businesses face mounting challenges in securing stable and cost-effective supply chains. From shifting trade policies to increasing tariffs, companies must remain agile and adapt to rapid changes.
We sat down with Hasse Faxe, Global Sales Director of Kitron Group, to discuss how Kitron recognizes these challenges and proactively offers solutions that help customers navigate the evolving market.
Q: In recent years, the electronics manufacturing industry has faced supply chain disruptions. How has Kitron adapted to these challenges?
Supply chain resilience is a priority for us. The global component shortage, especially in semiconductors, has forced the industry to rethink procurement strategies. We’ve strengthened our supplier relationships and invested in advanced supply chain analytics to improve forecasting and risk management.
Additionally, our global footprint, with facilities in Europe, North America, and Asia, allows us to source components strategically and optimize production based on regional capabilities. This flexibility has been crucial in mitigating supply chain risks.
Q: How is Kitron helping customers deal with supply chain uncertainties, especially with tariffs and trade tensions?
Many of our customers' biggest concerns are where to source their products to avoid high import tariffs, particularly in the U.S. With new tariffs evolving, we expect counteractions from Europe and potentially China, making global trade even more complex. So, the challenge right now is basically a resilient supply chain that can quickly respond to whatever situation in the market can be. And that’s where Kitron provides value.
We help our customers by offering regional manufacturing options, allowing them to have flexibility in production, whether in Asia, Europe, or the U.S.
Q: What has been Kitron’s experience with customers adjusting their supply chains due to global trade shifts?
We’ve seen several examples over the past few years. Some customers, especially those with key markets in the U.S., have moved production out of China due to tariffs. On the other hand, customers with strong demand in China or Asia continue to see China as a preferred manufacturing hub.
Our role is to help customers align their supply chains with their market needs. By maintaining a global footprint and the ability to shift production between sites efficiently, we ensure that our customers are prepared for whatever trade policies or economic shifts come their way.
Q: Kitron has manufacturing sites worldwide. How does this help customers mitigate risks?
In Asia, our China-plus-one strategy is a key part of our approach. We’ve made significant investments in Malaysia to provide an alternative manufacturing hub. Even with introduced U.S. tariffs, Malaysia still has some of the lowest rates in Southeast Asian countries compared to others, such as Thailand or Cambodia. It is a well-established manufacturing ecosystem, making it a choice for companies looking to diversify their production footprint.
At the same time, we have maintained a strong presence in the U.S. for many years, with available capacity for industries requiring domestic production, especially in high-regulatory sectors like defence and medical devices.
Q: How is Kitron positioned to address potential challenges in the U.S. and the need to change the supply chain?
Over the past six months, we’ve been closely monitoring the evolving situation. Our manufacturing site in Pennsylvania, with its long-standing experience, is strong and capable, enabling us to offer local production options that provide flexibility and help mitigate potential supply chain disruptions. Additionally, we are considering acquisitions in the U.S. to further strengthen our capabilities and better serve our customers.
While we are well-positioned to support both existing and new customers, it’s important to acknowledge that overcoming the industry's challenges will take time. We remain committed to navigating these changes and ensuring a seamless experience for our customers.
Q: Kitron has mentioned a potential local presence of manufacturing in India. What is the strategy behind this move?
Right now, we are actively exploring the opportunity to expand our business with local manufacturing in India. For many of our customers with end markets in India, this will be a highly attractive option. We have been considering this move for a few years, but now we are very close to making it a reality. This expansion will be a significant step for both our existing customers and potential new customers looking to serve the Indian market more effectively.
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Q: What about European customers? How does Kitron support reshoring efforts?
For European customers considering reshoring, our presence in Eastern Europe, in the Czech Republic, Poland, and Lithuania, provides a cost-competitive and geographically strategic alternative. While moving production from Asia may slightly increase costs, many businesses see this as a necessary step to reduce long-term risks.
With the right level of automation and for the right type of products, many of our customers may start considering a future where production returns to Denmark, Sweden, or Norway. Certain products could potentially be moved back to Scandinavia, depending on their specific requirements.
Q: Can you describe what sets Kitron apart from other EMS providers?
We’re in a unique position compared to competitors. Despite being a mid-sized company, we operate 10 manufacturing sites globally, giving us the flexibility and responsiveness that larger companies often struggle with.
Kitron has been moving products between our sites for years. That experience gives our customers peace of mind, knowing that if anything happens, we can shift production quickly and efficiently.
We’ve also invested in a unifying ERP system at all sites, streamlining operations and improving data visibility. We also make sure our machines and systems are compatible across different locations, so transferring production isn’t a huge hassle. While each site operates independently, we coordinate closely and are always aligned, especially when it comes to big investments. The bottom line? If a customer needs to move production from one site to another, we can make it happen smoothly without causing major disruptions.
Another major advantage is our in-house automation team. We continuously invest in automation and digitalization to improve production efficiency, reduce costs, and maintain high quality. This is crucial in today’s market, where inflationary pressures and labour shortages are real challenges.
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Sector diversification applies not only at the Kitron Group level but also at individual sites. While other EMS providers also operate across multiple sectors, we’ve seen cases where some have been heavily dependent on a single industry, such as automotive, and are now struggling. Similarly, those not involved in defence may be missing out on the significant opportunities that are currently driving our growth.
Q: What could be your key takeaway for customers looking to secure a resilient supply chain?
1. Manufacture close to the end-customer market. With changes in tariffs, it’s important to manufacture as close as possible to your customers to stay agile and minimize risks.
2. Choose a manufacturer with a strategic network. At Kitron, we’re well-positioned to support this approach by offering regional manufacturing options in Asia, Europe, or the U.S. while actively exploring acquisitions.
3. Ensure your EMS partner can shift production if needed. Kitron has experience transferring production between sites. We offer flexibility in responding to changing market conditions or unexpected challenges. It sets us apart from smaller competitors who may lack the resources.
