Viking Test Services: Much More than Test

Estimated reading time: 28 minutes

Starkey: Now in that service, are you primarily focused on the UK market? I would think globally this is more difficult for people to select you, just from a geographical point of view.

Kelly: Most of our spindles probably do come from the UK, but I would like to do more abroad and there's no reason why we can't, because a spindle will fit in a box the size of a shoe box and weighs on average probably three kilograms, so there's no reason why we can't do more abroad. We do quite a lot for our customers, and we probably do so for a lot of foreign countries.

Starkey: It's open to the entire world, you're not limited in any way then?

Kelly: Yeah, and there's no big tax or duty issues because it's classed as a repair so it comes in and it goes back out again. We’re just looking at an international shipping charge, which isn't so huge. That's only a small percentage of the overall cost anyway.

Matties: When you look at India, how many shops are there that you can service in the PCB sector? You mentioned the phone sector as well.

Kelly: Currently in India there's approximately 50 PCB companies. There's probably a similar-sized market to the UK in terms of the gross value of the product as well. You've got one huge player there that probably looks after, on its own, about 50% of the total value of the boards manufactured, but 95% of that is exported and it's simple. It's double-sided or single-sided boards or low layer count. You've got a handful of low technology, small shops. You've got those in-between, and then you've got a couple of, I wouldn't say high technology, but moving towards higher technology companies. We're in a position, or we will be soon, to be able to service them all to one extent or another. India's got a couple of government facilities as well that are making high technology boards for aerospace or for military application.

Starkey: As far as servicing them, you mentioned the test lab for some HDI and such that you're setting up in India. Is that part of the strategy there?

Kelly: Absolutely. It won't just be for the Indian market, we would be able to expect to get samples and products from all over the world for that because it's such a niche market. The high technology shops in India I'm sure would use that service or have said they would use that service.

Matties: In India, I've not been there yet to look at the marketplace. Are the shops relatively newer shops?

Kelly: No, they're not. I would say they're older shops with mostly older equipment, with old technology and old manufacturing styles.

Matties: There's room for new ...

Kelly: Huge room. This is what it's all about. Since this huge defense budget's been released, since the new Make in India incentive has been released, and with these big contract electronics manufacturers there, we're just getting so many inquiries at the moment for equipment. But more so, it’s not just for a few individual items of equipment, it's for complete turnkey greenfield sites to build and manage.

Matties: It's a game changer for you?

Kelly: Yeah, totally, and a game changer for the Indian market and for the PCB market. I mean some of these factories I'm talking about are enormous.

Matties: Great. How much time are you spending in India these days?

Kelly: I've gone out three times in the last six months.

Matties: Quite a bit.

Kelly: Yeah, and it will be more since we've now opened our office, which I did on my last visit. I'm going to have to be going out there a little bit more now.

Matties: What city is your office in?

Kelly: It's in Mysore, near Bengaluru, which is fairly central. We're in the southern side of things.

Matties: We always hear about the weak infrastructure and the challenges in that regard; what have you seen?

Kelly: I think in some respects the infrastructure in India is considerably better than the UK's actually. If you look at data and mobile phone signals, I get a much better service in India than I do here in the UK. The road system is, in terms of that, not as good, but saying that, they're building an awful lot of new highways and roads at the moment. Everywhere I go you see building work going on. It's still a developing country so I wouldn't expect it to be as good as here, but some infrastructure is better.

Matties: People are likening it to China 15 years ago, and we saw how fast China turned from 15 years ago.

Kelly: Yeah, China's incredible. Every time I go there there are new roads, new subway stations, and not just stations, but complete networks set up. We go to Shenzhen primarily, and when we first went I think there were five underground subway networks, and I think there's now 12. There's a new railway being built between Shenzhen and Shanghai. It's just phenomenal how they've grown, and it seems to be in a very controlled way. It's quite amazing. I don't know if India is ever going to get there.

Matties: Automation is obviously key in China and a big driving force. How is the attitude towards automation in India?

Kelly: There is very little automation in India at the moment. The labor rate if anything is lower in India right now, I would say, than China. As China has developed, the labor rate has gone up and up and up and up.

Matties: It's skyrocketed. Do you think that the shops going into India will obviously be looking at automation?

Kelly: Yeah, the factories that we're designing at the moment are fully automated. That's not just from a cost point of view, that's from a quality point of view more so than cost. Less handling involved, but less defects and that's it really.

Matties: With the products that are being built there, there's almost 1.3 billion people in India, so there's a large emerging marketplace right there—like we’ve seen in China with their transition from export to domestic.

Kelly: There's something in the order of 20 million mobile phones being sold every month in India at the moment. It's a staggering amount, and all of that is finished product being brought into the country. There are some large contract manufacturers set up now that are doing assembly work, and from those will be satellites of businesses coming in to support that. If you look at the bill of material of a mobile phone, you've got the component, you've got the assembly side of it, you've got your casing, you've got the packaging, and you've got the bare board itself, which is somewhere around 7% of that total value.

Matties: Jake, is there anything that we haven't talked about that we should be discussing?

Kelly: We are developing a new machine at the moment that’s in the very early stages. It's a plasma technology, but I don't want to give too much away at the moment actually on that. It's too early on and it's too novel.

Matties: This will be a piece of equipment that you will manufacture yourself?

Kelly: I hope so.

Starkey: So you're still looking to be in a manufacturing capacity of some sort.

Kelly: I would like to. I want to make something. We've got this concept, I can only say it's not a design, it's a concept at the moment that we want to work with the government to get some funding. I want to maybe work with some universities to get some additional help. I see this as a potential technology-driven machine that I think would work well and I want to make it here.

Starkey: That's good. There's nothing like being a craftsman and building a product from the ground up and seeing it come to fruition and off into the manufacturing environment.

Kelly: Yeah, and sell it worldwide and get distributors set up and work that way. I'm excited about it.

Starkey: Let's shift gears just a little. We were recently at the EIPC conference, what do you think of those sorts of conferences and what do you get out of that?

Kelly: I got a tremendous amount from this conference. The last EIPC conference I did was probably 10–12 years ago in Russia. I always get a lot from going to these events and I don't do enough of them, but based on this last one in Edinburgh I'm definitely going to go again. I want to sponsor it again, I think it's a great networking event, and like I said, I've always kind of shied away from these things. There always seemed to be something better to do, like go and see a customer or something.

But I got tremendous value from being there, meeting not just customers but suppliers alike, listening and learning about the trends in manufacturing worldwide from different global markets, and looking at new technologies that are coming out and just being part of our industry. I'm still quite passionate about our industry and I want to support it, and it's a shame that even though there were 80+ people at this conference, it didn't seem to be enough. There's not enough people there supporting it, whether that would be customers or suppliers alike.

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