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SMT Renting: A Trend for the Future?
May 2, 2018 | Andy Shaughnessy, I-Connect007Estimated reading time: 7 minutes
You may have heard the name Martin Ziehbrunner before: he cofounded the equipment company Essemtec AG in 1992. He left the company in 2013, and soon he'd cofounded another SMT company, but with a twist. SMT Renting specializes in renting SMT equipment with an operational lease, primarily for the European market. I spoke with Martin at productronica, and he explained how his latest company is challenging the normal way of acquiring SMT capital equipment.
Andy Shaughnessy: I'm here with Martin Ziehbrunner, the managing director of SMT Renting. Martin, why don't you give us a little background on SMT Renting.
Martin Ziehbrunner: We are a finance company. We do financing of equipment focused on SMT electronic production equipment, so we found there's a way of coming out from the industry, basically. We have been in the industry of electronic production equipment for 25 to 30 years, so we know the equipment model very well.
We do this throughout Europe, including Eastern Europe, of course, and provide financing services for all kinds of suppliers and all kinds of machines. It's not just for specific machines. We finance the whole range of SMT production machines: AOI, printing, pick-and-place, and whatever you may need. This is from single machines up to complete turnkey lines, and basically from all suppliers which are in the market, so the costumer is choosing the supplier.
Shaughnessy: At first, it would seem like it would be more of the smaller companies that would be interested in this. Is that how it is?
Ziehbrunner: When we started about three years ago this is what we thought as well. Nowadays, it's completely different. The majority of the inquiries and contracts we have is with big companies. The reason behind it is that they see the flexibility in the model. It is a financing model where you rent your equipment for a longer time frame, for example five years, but you can change and adapt the equipment during this time frame.
So they get the flexibility of paying simple a monthly rate, even changing equipment or adapting equipment during this time frame. So it is full flexibility for them. They're not blocked for five or six years of investments, and they are free to adapt their equipment during this time frame.
Shaughnessy: It's almost like maintenance for EDA software.
Ziehbrunner: Yes, something similar like that.
Shaughnessy: I could just imagine buying an SMT line, and in five years or less you realize you need to change it out. That's just tough on your time, resources, and your bank account.
Ziehbrunner: Exactly. That's really the basis behind it, and the big driver of course is Industry 4.0. A lot of customers have machines which are not capable of being linked to Industry 4.0 MES software and so on, so they're blocked and they cannot take the next steps. They’ve bought the equipment, they have to keep it, and they have to deduct it and annuitize it and so on. So they're not free, and this is what we are changing with this model.
Shaughnessy: It seems like a good idea. Do you get any orders in the States or outside of Europe?
Ziehbrunner: At the moment we are doing it only in Europe. There are plans to do it in the States as the next step. We have customers outside of Europe, but normally they are European companies renting it here in Europe and then placing the equipment outside of Europe. For example, we had one European EMS company which has production sites in India, so they rented the equipment here but it is actually placed in India.
Shaughnessy: Is anyone else doing this? I've never heard of anyone else using this model.
Ziehbrunner: No, at the moment we’re the only player in the market. Of course there are the normal financial leasing possibilities from banks and all the leasing institutes, but what we're doing is an operational lease, which is also why we call it renting and not leasing. Basically, it's more of a renting model. We see that, in general, these models quite often where businesses are using the pay-per-use model instead of buying like in the old times. You also see the same tendencies in the car market where you find newer models. Volvo just introduced a new car, an electrical car, which you cannot buy anymore. You only can rent it, and this is the tendency where we see the industry is going. We think the buying behavior will change.
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