Unpacking Polytron-Print's Resilience in the European PCB Landscape with CEO Michael Müller

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Hello, I'm Philip Stoughton.
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I'm on the Adion Technologies booth at Productronica 2023 and I'm joined by Michael Müller from Polytron.
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Michael, thanks for joining me.
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Start with a brief introduction to you and to Polytron.
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So my name is Michael Müller.
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I'm the CEO of Polytron Print.
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We are a mid-sized PCB producer in Germany, located in the Black Forest Turnover for 28 million last year and everything we do is made in Germany.
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We don't trade ports, it's only basically full production in Bad Vilpat and in terms of your technology Max, you were telling me earlier that you've kind of moved up technology more into the HDI area.
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But also, what kind of industries are you serving?
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It's mainly industrial applications and sensors like the safety sensors, light switches, stuff like this.
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Also some kind of what we call infrastructure for buildings elevators, escalators, heating appliances, ac, smart metering, stuff like this.
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But it's mainly it's like 60% industrial applications.
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Yeah, that makes sense, doesn't it?
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And when you look at those, we're talking a lot this week about whether we're seeing a reshoring train, whether we're seeing stuff come back to Europe.
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People are buying that stuff from you for a reason.
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Is it because you're in Europe, or is it just because you're very good at what you?
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do?
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That's a very good question.
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Probably both.
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I mean we have a very long term relationship with our customers.
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I mean we have our company is 53 years old now and we have customers buying boards from us since 53 years, so I think we stand for really good quality and for flexibility.
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We have lost the flexibility last year because everything was crazy, but we are getting back the flexibility and that's what our customers are still looking for, like even not only for sample jobs, but also for higher production volumes.
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You need to get it fast and that's what we can do, because we are 115 people and we have a very lean structure and so we can do flexible things.
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And agility.
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Fast turnaround, flexibility that's what your customers really value.
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For me, yes, yes and the quality.
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Of course, I mean they pay higher prices because they get it from Germany.
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They could buy it much cheaper in China.
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But there are reasons.
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I mean you have to look at the whole package.
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And the whole package is not only the price, it's also its quality, its flexibility, its discussion in the same language, in the same time zone, since we basically only sell in Germany.
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And when you look at that, are they buying German because they think Germany is the right place to buy from, or are they buying German because, within the product that they actually deliver into the customer, that made in Germany is a valued asset?
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Yes, I think it's a combination of many things.
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Most of our customers are OEMs and so they have maybe a little bit more money to spend than an EMS.
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I mean only 4% of our sales we are doing with EMS because EMS is very price sensitive.
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But our customers, they are selling a finished product.
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They maybe have one or two euros more and they want to have a board which works for the next 20 years.
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So that's what they are looking for.
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And it's interesting that you say that your minimal amount of exposure to the EMS industry because they are under they are under considerably more price pressure.
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I mean all of our customers are buying boards in Asia.
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It's just a question to which extent and I think the EMS people, probably because they have to are buying.
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Let's say, 80% to 90% in Asia and 10% in Europe.
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But I always tell our customers our industry in Europe cannot survive with 10% of the business.
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But the OEM customers, they have a different split, like 50-50 or they buy 60% in Germany or Europe and 40% in Asia.
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It's depending on the industry you are supplying to.
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Yeah, and it impacts the mix.
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We're hearing this trend and this trend sits against the last 20 years where so much business has gone to Asia.
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20 years ago, I think, 20% of the world's PCBs were made in Europe.
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Now it's somewhere between 2% and 3%, but your businesses continue to succeed in that time frame.
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Why do you think the industry has declined?
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Is it just down to price?
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And how have you been able to insulate your business from that?
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Well, you have to have the right customers.
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I mean that's the main key.
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We stay away from automotive industry because that doesn't fit to our company size.
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And again, the industrial customers have a little bit more money to spend and they are willing to spend a little bit more money and I think they get good service from us, they get good quality from us, they get it right in time and that's what they want and that's why we have a long-term relationship with the customer.
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I mean, it sounds crazy, but we don't need a lot of new customers because we don't lose the old customers.
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Yeah, that's usually valuable.
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It's much more expensive to get a new customer than to keep one by satisfying their needs.
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Yeah, and also our strategy is not to grow like 10%, 15% every year.
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I mean, we grow if the market is growing, but we have a certain capacity and we will not extend our capacity.
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At the moment we are going rather from a two four-layer board to HDI boards.
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And one of the things we're also seeing in Europe is a bit of a battle for talent.
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It's hard to recruit people.
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It's hard to get people excited about working in a printed circuit board factory.
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How do you deal with that?
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Is automation part of the solution?
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Yeah, automation is part of the solution, but you still need the people.
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And you can write everything down on paper and on your servers, but you still need the people who have the talent and the brains to do that every day in production.
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And we have multiple problems.
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First of all, the young kids don't want to come in our industry because if they look to the industry from the outside, it's not really sexy.
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And the next problem which we have we are very close to Stuttgart with Daimler Bosch.
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They pay much higher wages than we can do as a small company.
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So it's difficult and that's why we are building our own employees.
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So we have a couple of apprentices.
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We hire them directly from school and they learn different things, like electroplating or stuff like this.
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So we are trying to to build our own workforce, because it's very difficult If you lose people.
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To get them back is very, very difficult.
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That's why we spend a lot of time in training and that's why we try to make the whole package work for our workforce, because nothing worse than if they leave, because getting new people is very difficult.
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Once you have it, you need to train them for 12 months and it's so you have to.
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You have to keep the people.
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You have to do whatever is needed to do.
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You have to pay the right amount of money, but you also have to take a look at the whole package so that the people are happy.
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And you know it's interesting what you say Retain the same customers, retain the staff.
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It's all about creating a business that has momentum and has loyalty within it from both sides.
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What do you see as you look forward?
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We're seeing a little bit of a challenge in terms of the European economy.
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We're seeing a little bit of a challenge in terms of demand.
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You've been around for 50 odd years as a, as a company, so you've seen a few ups and downs before.
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How do you see 2024?
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Oh, it will be a difficult year.
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I mean, right now business is very slow because storage is still full at our customers' sites and since it's not, it's not going, we cannot ship new boats.
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That's that will be a major problem for next year.
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Incoming orders are really really slow and we will see.
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I think a couple of a couple of companies in our industry will have problems next year.
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I mean, that's not for us, but we are.
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We are healthy, we have enough money on the side so we can survive for a certain time.
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But I see the difficulty if more companies disappear from our, from our industry I mean the people like over there Schmoll or Schmeet or even here these guys, they cannot sell any more equipment.
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So we are not.
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The industry is no longer interesting for our suppliers and that's what I'm afraid of because we're a small company.
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If you have to go purchasing equipment in China, it's it's going to be difficult.
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I'm not looking forward to this.
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So I'm really happy that all these guys are spending a lot of money on exhibiting here at the show.
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I think that's a great thing.
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Yeah, I think it's really important what you what you allude to.
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There is a critical mass within the industry.
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If you don't have that critical mass to maintain the support and ecosystem around, you can get smaller, yeah.
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Yeah Well, thanks for spending the time time with me.
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Congratulations on the business.
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I hope it continues to succeed for the next 54 years and we'll we'll talk soon.
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Yeah, thanks a lot.