THERE has been a disturbing slump in the proportion of locally-sourced
parts and materials used by the Scottish electronics industry, according
to a new survey released today.
The Scottish market share for supplying the electronics sector has
fallen from 12% in 1992 to 5% now, according to SPEED, an industry-wide
partnership concerned with effective distribution.
Material supplies from other UK companies also fell, down from a 15%
share in 1992 to 10% now. The rest of Europe's share fell from 24% to
20%.
The dominant supplier to Scotland's electronics plants is now the Far
East, whose share has grown from 24% in 1992 to 37% now, thanks to new
suppliers entering the market and intense price competition and despite
the trend to just-in-time sourcing.
When parts and material suppliers in the United States (with a 27%
share) are taken into account, Scotland's import bill to feed its
electronics plants now stands at #5340m compared with #4929m two years
ago.
The 1994 SPEED survey covered 600 Scottish-based manufacturers,
including 250 within the electronics sector. Total responses in
electronics represented 87% of sectoral turnover, so the results are
likely to be very close to the truth.
According to the survey, turnover in Scotland's electronics sector
grew by 26% to #9317m in the past two years, while employment increased
3500 to 46,500. Although the trend in local sourcing is deeply worrying,
material content as a percentage of total turnover has fallen from 66%
to 57%, indicating a shift towards greater value-added activity.
The rise in Far East sourcing has led to a significant increase in the
proportion of material coming here by air. According to John Henderson
of SPEED, ''Air freight is now the most important mode of transport for
sourced materials used by Scotland's electronics industry, accounting
for 53% of materials by value.
''The air freight figures also underpin the importance of the Far East
and Pacific rim with 61% of incoming tonnage from that region and over
50% of outgoing air freight going to points beyond Europe and the USA.''
Mr Henderson warns that 35% of incoming materials are coming through
airports outwith Scotland. The vast majority of that 35% is arriving at
English airports, underlining Scotland's lack of direct routes to the
Far East.
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