Elma Electronic AG

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Elma Electronic AG

Postfach, Hofstrasse 93
Wetzikon, CH-8620
Switzerland
Telephone: ( + 41 044) 933 41 11
Fax: ( + 41 044) 933 42 15
Web site: http://www.elma-group.com

Public Company
Incorporated: 1960
Employees: 683 ySales: CHF 121 million ($99 million) (2005)
Stock Exchanges: SwitzerlandyTicker Symbol: ELMN
NAIC: 335932 Noncurrent-Carrying Wiring Device Manufacturing; 335313 Switchgear and Switchboard Apparatus Manufacturing; 335931 Current-Carrying Wiring Device Manufacturing

Elma Electronic AG develops and produces backplanes, enclosures, subracks, and other packaging and housing products for electronic systems. The company is also one of the world's top three producers of 19-inch electronic packaging and rotary components. Since its inception, the Wetzikon, Switzerland-based company has supported the growth of the electronics industry, and has been a contributor to the development of many of the industry's packaging standards, including VME/VME64x, VXI, VXS, PXI, CompactPCI, AdvancedTCA, Switched Fabrics, PCI, and COTS. The company has also been responsible for a number of industry innovations, such as the StarFabric backplane and the GigaBridge PCI-switching backplane. Elma operates its main production facility in Switzerland, and through three main manufacturing subsidiaries, Elma Bustronic in the United States, Elma Trenew in Germany, and, since late 2005, Elma Mektronic in the United Kingdom. The company also operates sales subsidiaries in Switzerland, Germany, the United States, France, the United Kingdom, China, and Israel. In 2005, the company posted sales of CHF 121 million ($99 million).

ENCLOSURE START-UP IN 1960

Elma Electronic AG was founded in 1960 in Wetzikon, near Zurich, in Switzerland. The company began producing components for the growing electronics industry, and soon specialized in the production of cases and enclosures, and then backplanes, the racks on which electronic components are mounted. The growing importance of the electronics industry attracted the attention of a number of new players, including Sulzer AG, based in Winterthur, one of Switzerland's leading industrial groups, founded in 1834. Sulzer acquired the Wetzikon enclosure producer in 1970. The acquisition of the later Elma Electronic formed part of Sulzer's transformation from an industrial-oriented producer of heavy duty machinery to a technology-driven engineering company.

Backed by Sulzer, the enclosures and backplanes operation grew strongly, and became an early participant in the development of the Eurocard standard. Eurocard established fixed dimensions and specifications for the architecture and fittings used in electronic components manufactured in and for the European market. A mixture of metric and imperial dimensions, the Eurocard standard enabled the production of modular enclosure systems and components.

In the mid-1980s, the Sulzer subsidiary extended its operations to include the new VME (VERSA-module Europe) standard, which had grown out of the 68000 CPU developed by Motorola in the late 1970s. The VME standard offered Elma an important opportunity for diversifying its product line, as well as its range of technologies. As part of this effort, the company added new extrusion-molding capabilities, which it then adapted to the production of modular chassis designs based on its original line of Eurocard components. This enabled the company to come quickly to market with its first VME compatible enclosures and backplanes, launched in 1986. That product, called the Elmaset 2000 VMEbus System, featured a modular design and prefabricated components. The highly configurable system featured a variety of options, including power supplies, connectors, and backplanes, as well as choice of front panels, handles, and the like. Elma also backed up the launch with a strong service offering.

By then, the company had also extended its reach internationally, forming its first subsidiary in the United States, in Fremont, California, in 1985. In this way, Elma became an early player not only in the European market, but in the important U.S. electronics industry as well. Through the end of the decade, the group introduced a number of innovative products, such as a line of portable VME Towers in 1987, and rugged, shielded Type 12 enclosures in 1988.

The company's U.S. presence soon led it to form a partnership with Bustronic Corporation, also located in Fremont, founded in 1989. Bustronic provided an important contribution to the development of Elma's technology, and particularly in its development of increasingly sophisticated backplanes. Formed in 1990, the partnership between the two companies quickly intensified, and soon after Bustronic became one of Elma's core manufacturing subsidiaries.

INDEPENDENT AND
INTERNATIONAL

Elma also innovated on the service side, offering not only the flexibility to adapt its designs to its customers' requirements, but also the ability to adapt to the tight deadlines in the increasingly competitive global electronics industry. As such, Elma launched a new express VMEbus packaging service in 1991, boasting a 24-hour turnaround time.

A major breakthrough for the company came the following year, when it was tapped by Unisys Paramax to revamp the components infrastructure in its network of weather stations. At the same time, Elma continued to develop its in-house technologies. This led to the company's launch, in 1995, of an electronic autojumpering system. In that year, also, the company adopted the new VME64x standard, releasing the first of its high-performance backplanes.

By the mid-1990s, Sulzer entered a period of reorganization of its operations. As part of the company's restructuring, it decided to sell a number of non-core operations. Elma, which had posted steady growth during the previous decade, was therefore spun off as an independently operation company, with a listing on the Swiss Stock Exchange, in 1996.

Elma's product development continued strongly through the end of the decade. The company launched its new cPCI program in 1997, then debuted its rugged COTS (commercial off the shelf) system in 1998. The company also extended its range through the incorporation of the new CompactPCI standard introduced in the late 1990s.

As it entered the new century, however, Elma remained a small player in comparison to many of its major competitors. In order to improve its competitive position, therefore, the company embarked on a new international growth strategy, starting in 2000. Part of the company's growth effort involved the opening of new sales and marketing subsidiaries, including in France and the United Kingdom.

COMPANY PERSPECTIVES

Why choose Elma? Flexibility: Elma tailors solutions to individual applications to ensure fast and cost-effective results. Experience: extensive practical experience in packaging electronic systems is used to minimise the time taken to develop new customised solutions without compromising system performance or reliability. Compatibility: because the two key electromechanical components—enclosures and backplanes—are made in-house, Elma guarantees compatibility, consistency and reliability. Global resources: with manufacturing in Europe and the USA customers benefit from local service backed by global resources.

Yet acquisitions played an important role in Elma's new growth strategy. The first of these came in July 2000, when the company bought Printech Electronics Ltd., based in Israel. Printech, founded in 1997, provided Elma with a strong distribution unit for backplanes, enclosures, and related components in Israel.

Elma next turned to Germany, where it bought Trenew Electronic AG in 2001. Founded in 1987, Trenew originated as a producer of VMEbus backplanes. By 1988, the company had launched its first subsidiary, expanding into the Swiss market. The company grew quickly, and expanded again in 1992, adding operations in the United Kingdom. By 1995, the company had completed the acquisition of AKA-Mayer AG, adding its line of 19-inch components to its production capacity. The company added Romania to its operations, building a state-of-the-art design facility there. In 1998, Trenew entered France, establishing two branches.

Following its acquisition, Trenew and Bustronic combined technologies and resources, providing Elma with a unified force with which to expand its international operations. Trenew also became a strong component of Elma's continued growth. Through Trenew, Elma also made a number of acquisitions, such as the 2002 purchase of the "mechatronic" division of Switzerland's Elektron AG. That purchase was followed by the takeover of the distribution wings of two companies, Power-one in 2005 and Recom in 2006, both of which focused on power supplies. Also in 2006, Trenew acquired Switzerland's Hiltron AG.

In the meantime, Elma continued to build its international operation elsewhere. The company entered mainland China in 2004, launching a subsidiary in Shanghai to supply the Chinese, Hong Kong, Taiwan, and other markets. In 2005, Elma reinforced its position in the United Kingdom, acquiring Mektron Ltd. Based in Bedford, Mektron had been founded in 1995, and distinguished itself by 1996 with the launch of the first COTS convection cooled VMEbus enclosure designed for military use. Mektron went on to win a number of international patents, leading to its creation of a U.S. subsidiary in 1999. The addition of Mektron, which helped expand Elma's operations for the defense sector in the United Kingdom in particular, became part of a company strategy to reinforce its operations in high-value market segments, as a means to distinguish itself from its larger competitors.

Elma remained committed to developing innovative products. In September 2006, for example, the company released the G-box, a new low-cost base enclosure platform, as part of the group's contract assembly unit. The new box offered a readily customizable and inexpensive platform that could be modified and expanded according to customer specifications. The new product reaffirmed Elma Electronic's strong emphasis on customer service, a key element in the company's ability to compete in the fast-evolving, global electronics markets. After more than 45 years of operations, Elma remained a mainstay in the electronics enclosures and backplanes sectors.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Elma Bustronic Corp. (U.S.A.); Elma China; Elma Electronic AG; Elma Electronic France SASU; Elma Electronic Inc. (U.S.A.); Elma Electronic Israel Ltd.; Elma Electronic SRL (Romania); Elma Electronic UK Ltd.; Elma Trenew Electronic GmbH (Germany).

KEY DATES

1960:: Company begins production of enclosures in Wetzikon, Switzerland.
1970:: Sulzer AG acquires the company which later begins production of components based on Eurocard standard.
1985:: Company establishes U.S. sales subsidiary.
1986:: Company begins production of first extrusion-molded components under VMEbus standard.
1990:: Company begins partnership with Bustronics Corporation, founded in 1989 in the United States, which becomes Elma subsidiary.
1996:: Sulzer spins off Elma Electronic as independent, publicly listed company on Swiss stock exchange.
2000:: Elma launches international expansion, adding sales subsidiaries in France and the United Kingdom; acquires distribution unit in Israel.
2001:: Company acquires Germany's Trenew, founded in 1987, including its design facility in Romania.
2004:: Elma adds sales subsidiary in Shanghai, China.
2005:: Elma acquires Mektron Ltd. in the United Kingdom.
2006:: G-box, a new low-cost customizable base enclosure platform, is launched.

PRINCIPAL COMPETITORS

LEONI AG; Bekaert Hlohovec A.S.; Twentsche Kabel Holding (NV); Xaver Bechtold GmbH; Voltex Holdings Ltd.; Cablerie D'Eupen S.A.; voestalpine Austria Draht GmbH; Wilhelm Sihn jr GmbH and Company KG; KOPOS KOLIN A.S.