Post a Comment
News and New Products
RoHS, WEEE Leave Casualties
By John F. Mason -- Electronic News, 6/22/2006
The purpose of the EU Commission’s directives -- Restriction of Hazardous Substances (RoHS) and Waste from Electric and Electronic Equipment (WEEE) was to make the environment safer for the planet and its inhabitants, and in time it will. Meanwhile, it has left a very unsafe business environment for some companies.
RoHS will go into effect within days on July 1. WEEE became a law last year. But adhering to the stringent rules -- eliminating the banned substances for more expensive metals and changing manufacturing procedures -- has been costly for all, hard going for some, and a total disaster for at least one.
The disaster we know about -- and there are undoubtedly more -- is Advanced Intelligent Automatic Systems Ltd. (AIAS) in Cyprus, a private company established in 1984 with operational headquarters in Nicosia. It specializes in the design, development and manufacture of electronic information and display systems. The company’s R&D department, besides its hardware design capabilities, develops the operating system of its products as well as the application software that communicates with the machines. The company had a staff of 35 at peak periods.
AIAS’s products and the products of its suppliers and associates were known for their quality, excellent modular design and for their reliability and durability. All its products followed international standards of excellence, such as CE mark, NTCIP, IP65, ISO9001, OSHAS18001, and various communication standards. All products were at least IP65 insulated. The company provided standard, as well as specialized total-system solutions.
Customers included the governments of Cyprus and Greece, all banks in Cyprus including the Central Bank of Cyprus, stock exchanges, airports, seaports, municipalities, the police, hotels, stadiums, schools, factories, shops, offices, exchange bureaus and generally, all types of enterprises.
AIAS, in its effort to provide better, more advanced, solutions made agreements with various associates that could help in system integration using the latest technologies. Such companies are the Advisor group, Algosystems, Graphotyp and Intellisys in Greece, Telecom Italia and Technovision in Italy, Hand Held products, and Sunnywell Corp. in the United States, Tradition Ltd. in Russia, and others.
Although described as a manufacturer of circuit boards, the company began to produce, and sell, microprocessor-based systems -- equipment that included LED displays for outdoor and indoor messages, for exchange rates, time and temperature, scoreboards graphics arrivals and departures and gas stations.
The company produced the ECO-LED to replace the fluorescent and neon light from outdoor night signs that provided 90 percent energy savings. The company chose high luminosity for all its LEDs so they would be visible, not only at night, but at any time of the day with the very bright natural luminosity of the area.
In a one-on-one exchange, Andreas Gabriel, the owner and managing director of the plant, as well as head system software engineer, spoke openly about his situation. “Had the company been more aggressive, the plant could have expanded enormously by reaching out to more neighbors,” he said. “Besides Greece and Turkey, it could have set up sales offices in Egypt, Saudi Arabia, Syria and Jordan -- all good markets for a variety of products, as it is for Cyprus’ much heralded ‘four-season’ tourism industry.
“But we more or less dedicated ourselves to cover the needs of Cyprus and Greece. More than 30 percent of the work was exported to Europe, mainly to Greece, with some to Africa, and Asia. Our best year ever with exports reached $1.5 million.
“Then the sky fell in,” Gabriel continued. “We suddenly learned of the RoHS and WEEE directives. We didn’t even know they existed since no one from the government had informed us. They were apparently not interested, which was particularly annoying for a government that invests a mere 0.3 percent of its GDP in R&D, leaving that endeavor up to the individual.
“The necessary changes were overwhelming. For example, having to replace lead solder with silver alloys and the new lead-free materials, such as integrated circuits, forced us to replace all our equipment and to move from ‘order manufacturing’ to mass production. The cost of setting up a new factory using CNC machines, automatic placement systems, laser soldering, without even considering purchasing the very best machinery, would have reached $1.3 million. To replace the stock we needed, $200,000 more, and if we wanted to produce the same products again we would have had to replace not only the printed circuit boards but change the operating system, as well. I figured all this would cost more than a million dollars. If we had wanted to expand, starting up new products for extended markets this figure would have jumped to $1.5 million, which we simply could not afford.”
Gabriel noted that because there is no mass production needed in Cyprus and the company did not have the necessary export contacts, possible solutions would have been to set up sales offices in the neighboring countries, merge with a foreign company, or sell product ideas. But without the finances to back that, nothing was done, he said, noting that the Cyprus government would have subsidized such a move by 30 percent and cut the tax on the foreign company joining AIAS to 10 percent.
“The only bright aspect for me personally, as a software engineer who spent six years studying and many more designing operating systems, is that I believe our company helped Cyprus and its customers in general because we cared. All our products are still working. We are specialists and we like what we do. But that’s all over.
“All our products are still working. But when we go, who will look after the government projects when maintenance ends? We made 30 scoreboards, 97 percent of the Cyprus market. What will happen to them? We are specialists and excellent at our work and we care. But that’s over.”
Gabriel continued to note that his partner and R&D director, Savvas Hadjixenofontos, is a “genius” at producing a constant stream of innovative ideas. He asked the Ministry of Industry to work with him in developing high-tech incubators in Cyprus, and after four years of waiting has still not received a reply, according to Gabriel, who further noted that when Hadjixenofontos asked a French incubator company, they welcomed him and his idea.
“Had we known what the future held in store there were precautions we could have taken. We could have started laying off employees, making plans to pay our debts, which have reached $800,000. We could have stopped buying materials and production equipment to make non-RoHS-compliant products. But we weren’t told,” Gabriel concluded. “Unless a miracle takes place, all our work and dreams are gone.”
