LONDON -- Sales of electronics manufacturing services in Eastern Europe topped $10 billion in 2008 and could more than double over the next five years, according to new research.

Frost & Sullivan forecasts Eastern Europe's EMS industry revenues will reach $21.1 billion in 2013, a 111% gain over last year's figures.

Leading the way are several global manufacturers of home appliances that have established manufacturing bases in Poland, while some key EMS participants have made sizeable investments in the design services sector in the Czech Republic, and some others have established footprints in Hungary, Frost said in a press release.

"The globalization of many companies is changing the face of the EMS market, which is undergoing a massive transition with the product design and development being separated from the manufacturing process," says Frost & Sullivan Financial Analyst Janani Sankaran. "The Eastern European electronics manufacturing market alone accounts for more than 50% percent of the overall European EMS markets and is expected to grow with a rise in the number of manufacturers in the region."

Major EMS players in Eastern Europe include Jabil, Flextronics, Elcoteq, Plexus, Foxconn, CTS, Kimball, Enics, Neways, Scanfil, NOTE, Videoton, IPTE and others.

OEMs are increasingly turning their attention to smaller, emerging economies such as Romania, Bulgaria, Slovakia, Estonia, Lithuania, Belarus, and Turkey, Frost said.

Although market participants have reasons to feel upbeat about their market prospects, EMS providers are faced with constant cash shortage. They have not been able to tap the Eastern European market as effectively as they have cashed in on the Western European market. Setting up an EMS facility would involve substantial investments, which, in the current economic environment, are difficult to come by.

"Companies with lesser exposure to OEMs that engage in in-sourcing activities are likely to benefit in these economic conditions," said Sankaran. "Governments in Eastern Europe are also doing their bit to encourage investments in the region by facilitating special economic zone allocations to EMS companies and providing tax rebates to set up units in Eastern Europe."