Nobi opts for local manufacturing
“For high-tech companies, manufacturing is cheaper in Belgium than in China”
Today, the Belgian age-tech company ‘Nobi’ announced its decision to opt for local manufacturing. Nobi is known for its smart AI lamps for fall prevention and fall detection that help older adults live at home longer and ease the job of their healthcare workers. The complete assembly of the smart lamps, including electronics assembly (PCBA), will be done in the Antwerp region from 2023. The high-tech company consciously opts for local production with a view to flexibility between development and production, production security in uncertain geopolitical times, and a reduction of production costs. “For us, producing in Belgium is surprisingly cheaper than in Asia in 2022.”
Nobi aims to grow through an international expansion strategy. The first steps were taken at a rapid pace over the past year. Nobi currently has offices in Belgium, Austria, the Netherlands and New York. And an international partner network with local distributors and resellers ensures the distribution of the smart lamps in as many as 13 countries across three continents (Europe, America and Oceania). Despite its international ambitions, Nobi is consciously opting to anchor itself in its home region of Belgium.
ARGUMENT 1: production in Belgium is at least 18% cheaper than in China
In the initial business plan, Nobi opted for assembly in China. Today, the company chooses to bring assembly back to Belgium. Recent calculations show that, in the most pessimistic scenario, producing components in Belgium will be as much as 18% cheaper than in China. Nobi assumes the gains will be even greater in reality.
Explanation:
- Import duties on finished goods from China are high.
- The cost of international transport is high.
- Smart, tailor-made production lines for smart lamps guarantee far-reaching efficiency and thus significant savings compared to third-party production lines.
- Purchasing components from third parties is expensive. With in-house production, markups disappear.
The assumption that high labour costs in Belgium would throw the final balance sheet out of kilter also appears to be wrong.
Roeland Pelgrims: ‘At Nobi, 90% of the production cost of its smart lamps consists of material costs, and only 10% is labour costs, a big advantage when producing high-tech products. We plan to employ about 15 employees at our production site by the end of 2023. They will receive practical training, which is needed to realise the production of our high-tech lamps.’
ARGUMENT 2: production and commercial security in uncertain geopolitical times
The current turbulent times, with rising geopolitical tensions, are suddenly making local manufacturing very attractive in companies’ search for security. Nobi is also looking for ways to ensure the availability and affordability of components. By producing in-house, Nobi avoids long and uncertain waits for crucial components and has more control over material costs.
But local production is also becoming increasingly important in Nobi’s international sales process. Both Europe and the United States are increasingly cautious about privacy-sensitive technology produced in China. An obvious concern, especially for the medical and healthcare sector. Nobi does not, under any circumstances, want to risk having to halt imports and sales because its smart lamps are manufactured in the wrong country.
ARGUMENT 3: flexibility between thinkers and makers
The geopolitical context also forces companies to adapt at lightning speed to unpredictable societal leaps. Local production helps Nobi shift gears efficiently, quickly and creatively. This offers a competitive advantage and seems to be gradually becoming a necessity for ambitious high-tech start-ups.
Stefaan Joos, Head of Hardware, Supply Chain & Manufacturing: "There is also a need to implement any upgrades quickly and flexibly. Nobi’s smart lamps are already making a big difference in the lives of older adults and their caregivers. But its basic features, fall detection, prevention and prediction, are merely the beginning. Nobi’s products are constantly evolving. By bringing the product developers and factory team together, Nobi creates an environment in which modifications and improvements can be implemented efficiently and quickly in production".
ARGUMENT 4: local talent
Access to outstanding Flemish talent is also an advantage of producing locally. To cope with supply chain hiccups, Nobi is looking for specific technical profiles capable of adapting production methods quickly and creatively. Belgium offers a pool of talent.
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About Nobi
The Belgian Age Tech company Nobi was founded in 2018 and believes that everyone deserves to grow old in a dignified, safe and happy manner. The star of Nobi is its AI-powered smart lamp, which watches over the safety of older adults. At its core: fall detection and fall prevention. Nobi’s smart lamps support older adults at home, and partner with care staff in assisted living facilities, health care centres and service flats. They contribute to even more targeted care for the elderly and relieve busy caregivers from repetitive tasks. This way, their limited time can be spent on those tasks that really make a difference in the lives and happiness of older adults. Nobi currently has around 50 employees and operates in 13 countries. In early 2022, Nobi announced it had raised more than 13 million euros from EQT Health Economics Fund, EQT Dementia Fund, Flemish Investment Company PMV and BNP Paribas Fortis Private Equity. The existing shareholders also joined this second, by Belgian standards substantial and international, influx of capital. All this would never have been possible without VLAIO, which made the initial development of the lamp possible with half a million euros of support.
Liesbeth Pyck