Merlin Circuit Technology Limited Kestrel International Circuits

Citation

Ling, J. (2006), "Merlin Circuit Technology Limited Kestrel International Circuits", Circuit World, Vol. 32 No. 2. https://doi.org/10.1108/cw.2006.21732baf.001

Merlin Circuit Technology Limited Kestrel International Circuits

Merlin Circuit Technology Limited Kestrel International Circuits

Success is a journey, not a destination

Just to the west of the city of Chester on Deeside lies the village of Hawarden. It was here that, in 1976, a company called Kemitron was founded for the fabrication of high technology, multi-layer boards. Merlin Circuit Technology was founded in 1992 at Portslade, near Brighton, Sussex, and specialised in the manufacture of flexible and flexi-rigid PCBs. In April 2001, Neil Martin, chairman, acquired the 18,000 sqmetre Kemitron production facility, thus bringing together two respected fabricators to create a unique service provider of prototype, small and medium batch production series across the full technology spectrum.

Circuit boards are a fundamental customised element in electronic products. However, as circuit designs become more complex, dense and operate at higher frequencies, the board ceases to be a simple interconnection device and becomes a sophisticated component in its own right. It thus needs a sophisticated circuit board manufacturer to meet these demands, and at Merlin they seem to be doing just that.

When we talk about Merlin, it is important to include as well their sister company Kestrel International Circuits, who are based in Lancing, Sussex. Kestrel International Circuits was formed to import medium and high volume, cost competitive, quality printed circuit boards from the Far East. This enables all customers the opportunity of Far East sourcing with the back up of UK manufacture and engineering. Kestrel offers a complete service, from prototyping to mass production, using UK-based engineers to process all data requirements and who are available to resolve customer queries of DFM issues. The product range offered includes single and double sided, plated through hole, multilayer, flexible and flex-rigid circuits. A long established relationship with their suppliers ensures peace of mind, competitive pricing and the ability to conform to customers' individual requirements. Any product can be manufactured and shipped to the UK for future call-offs or Kan-Ban structuring. Kestrel International Circuits is, we are told, the sole UK agent for JEN-AN Technology.

At Deeside, they have their own “Design for Manufacture” experts who are well known for their extensive practical experience and the help they give to design engineers. This is provided free of charge as part of their customer service, and their technical assistance, understanding of circuitry and key issues like impedance control and complicated builds, has enabled products to be manufactured more cost effectively.

Their market for high technology multi-layer boards, which accounts for 85 per cent of turnover, is split unequally between export and home market. The remaining 15 per cent of their turnover is dedicated to flexible and flexi-rigid products, which are primarily supplied to UK customers. Product mix is currently four-layer 22 per cent, six-layer 20 per cent, eight-layer 15 per cent, ten-layer 14 per cent, 12-layer 12 per cent and 14-layer +17 per cent, with the current average layer-count for all rigid products being eight.

Exporting accounts for 24 per cent of total turnover; Norway is their largest export market but sales to France and the Benelux countries are increasing annually. They also export to the USA, China, India, Greece, Bulgaria, Canada, and Israel.

Merlin employs just fewer than 65 staff, around one third of whom are technicians, engineers and lab-staff. Between them, the staff has around 600 years of experience in printed circuit board manufacture (Plate 1).

Plate 1 Merlin employs just under 65 staff who between them have 600 years of experience in PCB manufacture

Malcolm Shields was appointed as Group Managing Director 12 months ago, and he has been moving Merlin & Kestrel forward at a steady pace (Plate 2). It is an interesting picture, painted against a background of a declining market and a decreasing number of suppliers. What is clear is that Merlin has not only inherited the mantle of Kemitron technical excellence, but also they have taken that excellence and used it to complement their astute reading of the market.

Plate 2 Malcolm Shields has been moving Merlin & Kestrel forward at a steady pace

Malcolm Shields is enthusiastic about Large Format backplanes, and if you look at the Merlin Technical Roadmap for the years ahead you will note that panels of 42in. width are being entertained. “We are 80 per cent there in terms of equipment” he says, “but we need AOI for that size panel. We've got a great facility, a great team of people, some excellent equipment, and, in addition, we are looking at 15 per cent growth next year”.

Malcolm, typically, was blunt about the state of the market. “There are a number of companies who are in distress at the moment, and we are capitalising on poor performance. Some companies have restructured, and are experiencing all the cultural difficulties in absorbing new staff as a result of amalgamations or consolidations. And I wonder if customers feel confident when their suppliers are only working limited days, and are fully owned or controlled by the banks?”

“Here at Hawarden we are strong financially, and so strong technically, that the customers have confidence in us. We have excellent relationships with our own suppliers, and we are attracting the right type of customer who wants to back a winner, in terms of the next 4-5 years. Our customers are driving our growth, and 15 per cent is what we are looking at for the next 12 months. To accommodate all that we have doubled the capacity to an £8 million turnover, assuming 24 hours working. In fact we are running a night shift in the critical areas, just to ensure the smooth flow of our short-turn work.”

“We can play tunes with our equipment, if you like: 50 panels in five days, or five panels in five days – all of this is value work, and there is a market for this type of work, for someone to do it and do it well. We have a great front-end, many years of experience, and that helps with our prototyping: we don't have the basic errors, and we do have the flexibility of spare machine capacity to allow the work to flow as and when we, and the customer, want it.”

“We have conventional shifts in place here, none of your continental stuff, with 12 hours on and 12 off, all that sort of nonsense. The luxury of 50 per cent of standing capacity allows you to be flexible. Do we have the right people? Oh yes, we have staff with 12- 15 years long-standing experience, and there are only 60 of them, so we are doing £60,000 per person, which isn't bad. Right now we are taking on school leavers and training them up, and if we wanted them, there are still plenty of skilled people about.”

Product mix? “Lots of microvias, and we find that we can mechanically drill microvias, they are more reliable, so we sold our laser drill. We can drill 0.1mm, and plate it, too. It eliminates another operation with an option for failure. You will always get an offset on a laser- drilled board, however hard you try”. Speed? “We've got speed, we have recently introduced an 8-head Pluritec; time to drill is fast here, and this machine gives us the capacity and the flexibility for short turn and medium turn work. It's an ex-Signum machine and we were very pleased to have it.”

Another asset Merlin has is their ability to bring in first-class equipment at very short notice at economic prices, so they do not have the normally high capital charges to carry as part of their overall costs. Recently they bought in a new Pluritec Giga 8888 drilling machine, a Klingenberg three-head router, two additional AOIs, a new Schmid automatic black oxide line, three new dry film laminators, a new six-daylight Bürkle press; overall they have recently invested about £1 million, and are now in the market for additional test capacity. Malcolm added, “We have now de-bugged all the way down to test, that's the last bit. 80 per cent of work goes down to flying-probe test, it's easier”.

A range of 60-40 is repeat business. “In a 15-day cycle we could be pushing out £120,000 of fast-turn, out of £340,000 of output. We have invested in technology and capacity, and never say no to any premium work. You must always have the appetite for the fast- turn work: maybe it is £5,000, but you take it, regardless if it does not quite fit with your work flow. This allows you to `put the fat back in', which is where you plough back profit into the ancillary and complimentary areas of sales & marketing, cover for bad debt (always a risk) and depreciation. You always get it back through your gross margin.”

Key strengths? “Technical competence, and bloody good service! We can measure our performance by customer perception. We regularly ask our customers what they think, and 80 per cent of our customers think we are good or excellent, and, of the rest, only 7 per cent have been disappointed, and we are working very hard to ensure that we can bring them back into the 'green bit'!”

Internally, Merlin is not sitting on its hands. As with any company that has inherited a factory built for the manufacturing styles and demands of 30 years ago, changes have been made as new equipment is installed, and systems introduced. The impression one forms from a tour of their facility is that this is one busy PCB workshop, and whilst it is currently not a “showcase”, that is not an issue. There are plenty of “showcase” board shops with little or no work right now, and shortage of work is not a problem at Merlin. Malcolm Shields is not a man to let such matters rest, however, and he outlined his plans for the “beautifying” or refurbishment of all the departments once his capital investment plans are complete. In the photomech. department, where some of the new equipment is in place, pristine white- tiled walls and sealed floors reflect the cleanliness required, and give a clear indication of how things will be impressive, in a word. For 12 months they have been doing the “heavy stuff” as Malcolm calls it, and they have done a lot in a short space of time.

He rues the fact that so many of his contemporaries have now disappeared, mainly into retirement, these industry “starkeyesque icons” as he eloquently describes them. There is a wealth of expertise and experience that has been lost to manufacturing, but then that is the nature of the infidelity of markets when the word global is introduced. Malcolm remains stoic in the world of closure and consolidation, and whilst he has nothing but admiration for the abilities of those to whom he referred, he is concerned about the “theorists” who have yet to feel etchant on their skin. Of his own Staff Malcolm has nothing but praise. There is more of a team ethos at Merlin than was ever the case at Manor Lane before, and a range of willing cross-discipline expertise that allows the efficacy of a smaller workforce.

A proud man, Malcolm is an engineer by training and inclination. He was apprenticed to British Aerospace at a time when they were making rigid circuit boards for their own consumption. That was how it was then, large companies making all their own components. He went through all the manufacturing processes by turn, and finished up in charge of quality. BAe had invested huge sums of money in state-of-the-art equipment for circuit board manufacture just before they decided to close the facility down. That was how it was then, large companies making the big decisions. Thus it was that Manchester Circuits came in to buy all this wonderful kit, and they took Malcolm with them, and put him in charge of quality.

After some years at Manchester Circuits, Malcolm went after a job at Microtech Group in 1992 as Operations Director, delivering a time of considerable growth and profit. He then progressed to Lyncolec in 1997, where he had a happy time of it until Neil Martin promptly invited him to head Merlin & Kestrel, where he has been as industrious as ever.

Merlin, he admitted, did have a small dip in orders the summer, but their attitude was not to go chasing out for new business at any price. Do not compromise, says Malcolm, do not produce c^**p. Sweep the floors, tidy the place and get ready for when the customers you know, and whose demands you know, come back; then give them good service. This they did, and have been hard at it ever since.

Like an engine from Rolls-Royce, performance is firing on all cylinders and maintains an even beat through all the climbs and dives of the market. In the battle for British circuit board manufacture, it is good to have a Merlin in front.

John LingAssociate Editor, Circuit World