Growth at Aaron Value Adding Services, the electronic circuit manufacturing facility, has been helped because some firms are now moving back from sending manufacturing to Asia, writes Trish Dromey.
THE winner of the Innovation prize in this year’s National Enterprise Awards, Aaron Value Adding Services in Shannon, is pursuing export opportunities in the US and Europe, while also making plans to launch a product of its own for the first time next year.
Growth at the electronic circuit manufacturing facility, which caters for the semi-conductor, oil and gas, renewable energy and rally car sectors, has been facilitated by the fact that some multinationals are now pulling back from sending out manufacturing to the Far East.
“Costs in China have risen while wages in Ireland have dropped by an estimated 16%, and the cost of energy has risen dramatically — putting up the cost of transport from the Far East. Some manufacturing is staying here and some is moving back — the trend is working in our favour,” reveals Aaron founder and managing director Gerard Murray.
He set the company up in 2004, having identified a niche opportunity for a company to do some small-scale manufacturing for companies needing this type of facility at the design stage of products.
Nine years on, the company is employing ten staff, doing manufacturing for several multinationals based in Ireland and, over the last two years has begun to export to the UK, the US and Spain.
“Since 2010 and 2011 the size of the orders has been increasing. We have moved ten products back from production in the Far East,” says Mr Murray, who says turnover has been growing by an average 20% a year in recent years.
Planning to launch a new product for the equine industry as part of a joint venture with a design company next summer, Aaron is aiming for increased growth in 2014.
“We are targeting exports of 50% within the next three years and aim to have a turnover of €5m within five years,” says Mr Murray.
An electronics engineer who worked for a variety of industries, Mr Murray set up Aaron after he was made redundant by a Clare-based multinational in 2004. He had previously seen a small UK company offering small-scale manufacturing for multinationals and thought that this was something which would work well in Ireland.
Starting with a feasibility grant from Clare Enterprise Board and one employee, Aaron set up operations producing electronic products on site for a company in Clare. It worked on site for a subsequent customer, but by 2007 had purchased its own equipment and established itself at a 3,500 sq ft premises in Smithstown Industrial Estate in Shannon.
Initially the company concentrated on doing small orders for multinationals which needed small batches made here prior to switching to large scale manufacturing in the Far East. In 2009, when business suffered as a consequence of recession, Aaron began doing trade shows in the UK, signing up three customers there in the process.
Since 2010 and 2011 the company has experienced growth as a result of receiving larger orders from customers opting not to purchase in the Far East. Mr Murray says opportunities are also opening up to supply multinationals in Europe and the US which are bringing back manufacturing operations.
According to Mr Murray: “We now supply a wide variety of industries, including multinationals, as well as companies supplying them, and our customers include EMC and Analog and Tyco. Since 2012, we have also been supplying Analog in the US. Direct exports account for 15% to 20% of sales, but direct and indirect exports, combined, account for 95%.”
He says that supplying multinationals accounts for 90% of business and that the semiconductor industry is the largest sector for Aaron.
In order to make the most of the opportunities presented, the company has, with the help of Clare Enterprise Board, invested €120,000 in new machinery which will help improve efficiency and reduce costs.
Plans to launch a new product as part of a joint venture, with a design company are now at feasibility study stage. “While working with design companies, we noticed that some smaller ones don’t have the finance to bring products to market,” says Mr Murray
He saw an opportunity to use company resources and skills to develop and launch new products. Two products for the equine industry are expected to be ready for launch next year.
While the manufacturing process involves a high level of automation, Mr Murray says that the move into marketing and selling new products is likely to be more labour-intensive and will result in Aaron taking on additional staff. The expectation is that the workforce could grow to 20 or 30 within three years.
“Winning the Innovation Award this week came in recognition of the advanced manufacturing process used in developing new products in the electronics sector. This will allow us to further push our brand as an advanced manufacturer in this sector,” he said.
* Company: Aaron Value Services
* Location: Shannon, Co Clare
* Managing director: Gerard Murray
* Business: Electronic assembly manufacturing
* Staff: 10
* Exports: 15-20%
* Website: www.aaronpcb.com
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