Elcoteq SE, a global provider of electronics manufacturing services (EMS) for the communications technology industry, and Andrew Corp. have signed a global, long-term manufacturing supply agreement, which further strengthens Elcoteq's position as a strategic partner to Andrew Corp. in Europe and the Americas. The agreement is expected to increase Elcoteq's net sales by approximately 80 million euros (100 million US dollars) during 2007. As a result of this new agreement, Elcoteq will be responsible for consolidating and managing the whole supply chain of Andrew's filter business in Europe and will start manufacturing and system assembly in Mexico on a turnkey basis.
In addition, Elcoteq and Andrew have agreed that Elcoteq will acquire Andrew's manufacturing unit in Arad, Romania, including related equipment, work in progress and inventories. The total consideration to be paid by Elcoteq will amount to some 15 million euros. Elcoteq will take over the manufacturing unit immediately. The 1500 square-meter leased facility in Arad, Romania, employs some 250 people and is well located close to the Hungarian border in a very cost-competitive part of Europe. The unit will continue to provide final assembly, tuning and testing services for network equipment products, mainly filters.
Elcoteq has provided manufacturing and related services for Andrew Corp. since 2001. As a result of the new deal, Elcoteq will begin to manufacture Andrew's products also in St. Petersburg, Russia. In the Americas Elcoteq will start to offer manufacturing and related services to Andrew from the Juarez facility in Mexico. This business is expected to ramp up during the final quarter in 2006.
"We are extremely proud of Andrew's decision to expand its collaboration with Elcoteq. Furthermore, the plant in Arad, Romania, provides us with an excellent entry to a new country where we see good opportunities for expanding our operations," said Jouni Hartikainen, president and CEO, Elcoteq SE. "From the strategic point of view collaboration with Andrew Corp. is a perfect fit with our Communications Network Equipment business area as it will boost the area's sales significantly over the coming years, leverage our existing capabilities and set-up, and at the same time broaden the business area's geographical scope."
"We selected Elcoteq because it is the number one electronic manufacturing services company in the world for the type of products it will manufacture for Andrew," said Mickey Miller, group president, Base Station Subsystems, Andrew Corp. "Elcoteq has extensive experience in the production competencies required as part of our mixed manufacturing model. Elcoteq's expertise will help us achieve our goals of lowering costs, reducing complexity and increasing flexibility in our filter supply chain."