After its biggest customer, Hella, suddenly pulled the plug on their long-standing relationship, Sencio went belly up. The Nijmegen-based chip packaging specialist is working hard on a relaunch.
At the beginning of December, Sencio was declared bankrupt following a business dispute with its key customer, the German automotive supplier Hella. “They suddenly canceled the contract we had with them,” says Oliver Maiwald, CEO of the chip packaging specialist from Nijmegen. With Hella accounting for the lion’s share of Sencio’s revenue and the relationship being put on ice, cashflow got severely squeezed and Maiwald’s company was placed under the supervision of the bank. When salary payments were suspended, the 47 employees filed for bankruptcy.
Maiwald is working hard on a plan to resume operations with a reduced headcount. “The majority of our employees are almost exclusively involved in our business with Hella. The remaining work can be done with a smaller team. According to my calculations, I believe we can achieve a profitable relaunch.” To secure the required investment, Maiwald is in talks with interested parties who want to preserve his company for the Netherlands.
On their own feet
Sencio’s history already was quite eventful. It was founded as Eurasem in 1987 by a group of entrepreneurs, including Kees Beenakker, at the time scientific director of the Delft Institute of Microsystems and Nanoelectronics (Dimes, currently the Else Kooi Laboratory). The initiative was also enthusiastically supported by the Nijmegen city council and in particular by the mayor, the late Ien Dales, who had the ambition to establish a second Silicon Valley in the region.
Unable to keep afloat, Eurasem had to apply for a moratorium five years later. Joep van den Nieuwenhuyzen, a businessman who would later turn out to be of questionable repute, took over the company, along with the Euroline assembly line divested by Philips as part of its Operation Centurion. For several years, Eurasem worked for the telecom sector, but a project developing an airbag sensor planted the functional packaging seed. In 1996, the focus permanently shifted to sensors.
Another five years later, Elmos came a-knocking. The German automotive specialist acquired all shares and Eurasem was renamed Elmos Advanced Packaging. Although the Nijmegen outfit had some external customers, the focus almost exclusively turned to serving its new parent company. That changed in 2007-2008 when Elmos was hit hard by the financial crisis – its products mainly ended up in luxury cars, whose sales completely collapsed. The Germans decided to allow their packaging subsidiary to acquire new customers on its own.
There was no shortage of interest, but new business failed to materialize. Elmos was in the way. Potential customers didn’t warm to the idea of having their products packaged by a competitor. The obvious solution was a spinout. And so, at the start of 2011, about seventy employees landed on their own feet as Sencio.
Freed from competition issues, business began to thrive. In a peak year, some sixty million chips were suited up, divided into product series that could reach five million units. Next to Elmos, a growing number of new customers found their way to Sencio to have their custom packaging designed and made in Nijmegen. These included Belgium’s Melexis and a lot of fellow suppliers to the automotive industry.
Rise from the ashes
In the past ten years, Hella had grown into the key account. Such a huge dependency on one customer makes a company vulnerable. Maiwald realized that already when he came on board in 2014, taking over as CEO from John Pleumeekers, who has been with the company since the start in 1987 and had been acting as the managing director since 2001. “Ever since my joining, it’s been my goal to serve a more diverse set of markets and clients,” Maiwald points out. “We’ve made great strides there, having expanded from ten customers in 2014 to more than seventy in a variety of markets, including automotive, defense, industrial and medical.”
That’s why Maiwald has high hopes for a new Sencio to rise from the ashes. “We’ve got a solid plan for a successful relaunch.”
Main picture credit: Sencio