Packaging Technology

On track: Developing growth markets through internationalization and diversification Friedbert Klefenz, President of Bosch Packaging Technology

  • at the Achema Press Conference, June 19, 2012
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  • June 19, 2012
  • Packaging Technology
  • Presentations

press release

Good afternoon Ladies and Gentlemen.

I would also like to welcome you to the Bosch Packaging Technology press conference. The Achema here in Frankfurt is traditionally a very important event for us. As one of the industry's leading exhibitions, it offers us an excellent opportunity to outline our company's development.

In short, we have been – and still are – right on track. Once again in 2012, you can look forward to some exciting news and developments. Internationalization and diversification are the cornerstones of our strategy.

This basically summarizes our position. And now I would like to fill you in on some of the details. With sales reaching 791 million euros – up from 717 million euros in 2010 – 2011 was a very good year for Bosch Packaging Technology. This increase of roughly 10 percent is significantly higher than the market average. We mastered the crisis and emerged with strong momentum. With internationalization as one of the mainstays, our strategy proved successful. In 2011, we generated some 90 percent of our sales outside Germany. We managed to compensate for the crisis-induced declines in Europe and North America with our operations in Latin America and especially in Asia. Following a crisis year, our financial performance in 2010 already showed signs of real growth.

We successfully stabilized our workforce during the crisis two years ago. Since then, we have continued to add new personnel. Last year, the total number increased from 4,471 to 4,697 associates. 641 of them are employed in emerging markets. In the first five months of 2012, 100 employees have joined Bosch Packaging Technology.

What is next? As you know, we do not believe in grandiose predictions. At Bosch Packaging Technology, we have a saying: “If you want to know where you are headed tomorrow, pay close attention to what you are doing today.”

So what are we doing? First of all, we are aiming for a strong order intake. We are expecting our order books to peak at more than 900 million euros in 2012. And this is where our second strategic mainstay points to a stable trend: diversification! Bosch packaging machines are used in a wide variety of industries. The pharmaceutical industry accounts for 45 percent of our total business. This sector is even stronger than the food industry and known for being less prone to economic fluctuations. All available data indicates continued growth on a global scale. This makes us even more convinced that the high volume of orders points to a stable trend. The first four months of this year confirm that and for 2012 we can expect an increase in sales by twelve percent.

A key prerequisite for our continued success is to ensure that we are in a position to appropriately respond to changing conditions in the respective markets. Let me give you an example. As previously mentioned, our growth in Asia is very strong. Already today we generate about 20 percent of our sales in this part of the world. Our ability to work with liquid pharmaceuticals plays an increasingly important role in this region, because administration by needle ties in with cultural norms. Acupuncture is a tradition in Asia. In other words, our competence as a full-range provider enables us to supply the fitting packaging solution according to the preferred method of administration. That is how we fulfill the specific needs of the regional markets.

Along these lines, we evaluate new product groups and technologies based on how they fit into our portfolio and whether they actually contribute to long-term organic growth for Bosch Packaging Technology. We are extremely selective when it comes to acquisitions. Just two months ago, we expanded our expertise in inspection technology by taking over the Eisai Machinery division from Japan’s Eisai Co., Ltd. We make our customers’ products safer by identifying incorrect filling levels or particles. At the same time, this increases our line competence. With the acquisitions of Hüttlin and Manesty in 2011 we successfully enhanced our process technology portfolio in drying and granulation, as well as in tablet pressing and coating. My colleague Wolfgang Szczerba will provide details on these technologies later.

As we gradually expand our product portfolio, we are building our global presence in line with our strategy. According to studies long-term growth in pharmaceuticals spending is expected to increase from 856 billion dollars in 2010 to an estimated 1.1 trillion dollars by 2015. We expect a very dynamic development in Asia, the Indian subcontinent, Latin America and Africa – especially in generics, which will significantly gain importance due to expiring patents of well-known blockbuster products. As a result of this development, the European market, which up until recently accounted for about half of our revenues, now makes up a 'mere' 43 percent of our sales. Nevertheless, like the giant market in the U.S., Europe will remain extremely important in the future. Bosch Packaging Technology maintains close proximity to customers across all regions.

China is a good example: Ten years ago, we started out with what we would call a 'minimally invasive' operation with 13 employees in Hangzhou. We gradually expanded this plant and are now operating at full capacity with close to 400 employees. At the end of 2011, we started production at a second facility in Chengdu, in the Sichuan Province. This makes us China's largest local supplier of packaging machinery in a highly dynamic market that is increasing its exports. Last year, we added new operations in Panama and Thailand. In South Africa, we are the first major packaging machinery manufacturer with an own assembly plant.

Is this global presence really necessary? I am absolutely convinced it is. We can clearly benefit from the rapid development of emerging economies. But this will only succeed on a long-term basis, if we are still there for our customers with support, maintenance and service, after the machines are sold. In other words, we have to do everything we can to ensure our machines contribute to the success of our customers.

Our presence builds the entire network of our global resources and expertise. This includes as well cross-cultural know-how. We primarily work with local employees and learn from them as much as they learn from us. We have turned this valuable experience into a principle. New trainees with bachelor’s or master’s degrees have at least one assignment outside of Europe. This is our way of raising awareness and understanding for other cultures and markets.

“Invented for life” is the slogan of the entire Bosch group. In the pharmaceutical sector this represents a special obligation: One, we fulfill with high quality products and services that ensure accurate dosing, excellent hygiene standards and therefore support the daily work of medical professionals.

As human beings, we are concerned about the short supply of vaccines in developing countries and the fact that therefore still today thousands of people die from curable diseases. This is why we actively support the Developing Countries Vaccine Manufacturers Network. “Invented for life” – this is what defines our expert approach to technology. Experience it here at the Achema. My colleague Wolfgang Szczerba will now tell you more about our innovations.

The Bosch Group is a leading global supplier of technology and services. It employs roughly 375,000 associates worldwide (as of December 31, 2015). The company generated sales of 70.6 billion euros in 2015. Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. The Bosch Group comprises Robert Bosch GmbH and its roughly 440 subsidiaries and regional companies in some 60 countries. Including sales and service partners, Bosch’s global manufacturing and sales network covers some 150 countries. The basis for the company’s future growth is its innovative strength. Bosch employs 55,800 associates in research and development at 118 locations across the globe. The Bosch Group’s strategic objective is to deliver innovations for a connected life. Bosch improves quality of life worldwide with products and services that are innovative and spark enthusiasm. In short, Bosch creates technology that is “Invented for life.”

The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as “Workshop for Precision Mechanics and Electrical Engineering.” The special ownership structure of Robert Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group, making it possible for the company to plan over the long term and to undertake significant up-front investments in the safeguarding of its future. Ninety-two percent of the share capital of Robert Bosch GmbH is held by Robert Bosch Stiftung GmbH, a charitable foundation. The majority of voting rights are held by Robert Bosch Industrietreuhand KG, an industrial trust. The entrepreneurial ownership functions are carried out by the trust. The remaining shares are held by the Bosch family and by Robert Bosch GmbH.

Additional information is available online at www.bosch.com and www.bosch-press.com, http://twitter.com/BoschPresse.

RF00161 - June 19, 2012

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