Business/economy

Expanding global presence Bosch opens new plant in Cluj, Romania Production of electronic components

  • New location houses research and development as well as manufacturing
  • Investment of more than 70 million euros
  • Workforce of some 750 planned by the end of 2014
Cluj-Napoca – On May 9, 2014, Bosch opened its second automotive technology manufacturing plant in Romania. The international supplier of technology and services’ new location in Cluj will produce electronic components and control units for the European automotive industry. These components are used, for instance, in driver assistance and safety systems as well as for energy management. In the future, Cluj will also make the electronic heart of Bosch’s eBike drive. The company has invested more than 70 million euros in the new location, which lies around 450 kilometers northwest of Bucharest and provides a total floor space for industrial use of some 38,000 square meters. By the end of the year, Bosch will already employ a total of 750 associates at the location.

“The new location in Romania is an important pillar for Bosch and will strengthen our European manufacturing and engineering network. Moreover, localizing more of our manufacturing in Eastern Europe will help us increase our competitiveness,” said Dr. Dirk Hoheisel, member of the Bosch board of management, at the opening. The new plant forms part of Bosch’s Automotive Electronics division, which develops and manufactures electronic control units, semiconductors, and sensors for the automotive industry and other sectors. With 13 locations around the world, the division employs some 24,000 associates.

Local development of electronics and software in Cluj
Bosch has had a presence in Romania since November 2013 through its research and development center in Cluj. This center is focused on developing electronics and software for the products manufactured at the location. In addition, it offers engineering services to other Bosch locations as well as local customers. “It was the access to well-qualified engineers and the opportunity to work actively with the excellent local universities that were decisive factors in choosing this location,” said Hoheisel.

Bosch Group in Romania
The Bosch Group has been represented in Romania for 20 years and today employs a total of some 1,700 associates at four locations in the country. In addition to the new research and development center and automotive production plant in Cluj, Bosch has a production location for linear-motion technology and automotive technology in Blaj, as well as a communication center in Timisoara. It has a sales company for power tools, heating systems, security systems, and products for the automotive aftermarket in Bucharest. The capital is also home to a sales office for BSH Bosch und Siemens Hausgeräte GmbH.

Contact persons for press inquiries:
Germany:
Melita Delic, phone +49 (711) 811-48617
Trix Böhne, phone +49 (711) 811-6831
Romania:
Eleni Scheffäl, phone: +40 (021) 4057529
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Interpack 2014 Bosch Packaging Technology aims to keep strengthening its leading position until 2020 Market for packaging machinery in a period of transition

  • New locations in Asia and Africa planned
  • New markets to be opened up
  • PA 2020 strategy unveiled
Düsseldorf/Waiblingen – By 2020, Bosch Packaging Technology aims to grow considerably faster than the market, and to further expand its leading position in the realm of process and packaging technology around the world. “We expect to see fundamental change in the market for packaging machinery. We not only want to react to this change, we also aim to help shape it,” said Friedbert Klefenz, President of Bosch Packaging Technology, during the company's press conference at the Interpack trade show in Düsseldorf. On the basis of its PA 2020 strategy, the manufacturer of special machinery aims to continue expanding its business in the established markets, and to grow especially in Asia and Africa. In addition to this, the company intends to spur further growth by venturing into new fields of business.

“We are well on our way to realizing our plans,” Klefenz said. Last year, Bosch Packaging Technology's sales exceeded the one-billion euro mark for the first time. In fiscal 2013, the company increased its sales by 22 percent, from 914 million euros to 1.1 billion euros. This was largely the result of the first-time consolidation of companies such as Hüttlin, Manesty, and Eisai Machinery. After adjusting for consolidation effects, growth was 6.4 percent. Currency effects notwithstanding, Packaging Technology recorded internal growth of ten percent. According to VDMA, a trade association, the packaging machinery sector grew four percent in 2013. Including companies that were consolidated for the first time in the year under review, the company employed 5,600 associates at more than 30 locations, 12 percent more than the previous year.

Moving toward the next decade with the PA 2020 strategy
“We expect to keep up this pace of growth in the coming years as well. By the end of 2015, our annual sales are likely to reach the 1.5 billion euro mark,” said Klefenz. “But our plans also go beyond 2015.” Last year, the company defined its strategy up to the end of this decade with PA 2020. The strategy's central aim is to expand the company's current fields of business and markets and to venture into new ones.

Regional shift expected
At present, Bosch Packaging Technology generates around 40 percent of its sales in Europe, 30 percent in Asia, and a quarter in North and South America. However, for the coming years, a strong regional shift is expected. “Until the end of this decade, we aim to continue growing strongly in the established markets, such as Europe and North America. At the same time, we will generate far more than a third of our sales in Asia,” said Klefenz. Africa and the Middle East are also gaining significance. “Markets in Europe and the Americas will keep developing continuously. This means that the overall market for packaging machinery will grow. However, in the coming years, there will be a shift in the importance of regional markets,” said Klefenz.

Pharma segment growing strongly
The pharma segment is one of the drivers of Bosch Packaging Technology's growth. The company has benefited from the sector's dynamic global development. In the past year, it grew nine percent. In total, this field of business accounts for 52 percent of the company's sales. “This shows that a growing number of people have access to medication. It is also the result of the global growth of the generics business,” said Klefenz. At the same time, more complex substances and the ever-stricter requirements of manufacturers and lawmakers have placed growing demands on the packaging industry. “This calls for major innovative strength,” said Klefenz. In total, Bosch Packaging Technology spent around 4.5 percent of its sales on research and development in 2013.

Food sector: major order in Mexico
The equipment business for the food and confectionary industries also developed well. In 2012, Bosch Packaging Technology acquired the largest single order in the company's history. This year, the company will be delivering two packaging lines to a biscuit manufacturer in Mexico. Each line operates with six horizontal filling and sealing machines with fully automatic cartoning that can package more than 17,000 crackers per minute.

Alongside the sale of machinery for dry foods and confectionary, in the coming years Bosch Packaging Technology intends to significantly expand its business in the selected beverages and liquid food segments.

Service business continues to grow
Just like the entire industry, Bosch Packaging Technology expects to see the scope and nature of the service business change. “For this reason, comprehensive service is an important part of the PA 2020 strategy. Increasingly, customer expectations can only be met by companies with a broad range of expertise and a strong regional presence. We are one such company, and we offer a growing number of solutions that can be combined with one another in a flexible manner,” said Klefenz. As a result, the company's customers can get everything they need from a single source. This includes process and packaging machinery, as well as technologies for product handling, automation, and inspection. “In short, we offer one stop shopping. The customer contacts us once and receives, if desired, a full turnkey solution for their project. This includes not only machinery and equipment, but also the planning and construction of packaging lines, as well as assembly, maintenance, and service,” said Klefenz.

Save Food
Better packaging also means that millions of people are gaining better access to medications and food. Today, a third of the world's food still goes to waste, often as a result of inadequate packaging and storage. For this reason, Bosch Packaging Technology is involved in the UN's “Save Food” initiative. The project was launched in 2011 at the last Interpack trade show in Düsseldorf. “We are proud to be making a contribution,” said Klefenz. “Creating real value-added is also in line with the Bosch 'Invented for life' leitmotiv.”

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Annual press conference 2014 Bosch starts new year with strong sales growth in every business sector Bosch uses its broad technological and industrial expertise in the connected world

  • 2013: without extraordinary effects, margin of 6 percent
  • Sales growth of roughly 7 percent in the first three months of the year
  • Growth between 3 and 5 percent expected for 2014
  • Market leader in micromechanical sensor technology, a gateway technology
  • Opening up new and internet-based market segments
  • One billion euros in sales with driver assistance systems by 2016
  • Sales to double in Asia Pacific and the Americas by 2020

*Note: Due to a change in accounting policies, the 2013 figures can only be compared to a limited extent with the previously published figures for 2012. The decision to forego the application of proportionate consolidation affects mainly BSH Bosch und Siemens Hausgeräte GmbH and ZF Lenksysteme GmbH with a consolidated sales volume of some 7.3 billion euros.


Stuttgart – The Bosch Group has started the new year with a good increase in sales. In the first quarter, sales grew by roughly 7 percent. After adjusting for exchange-rate effects, the increase was roughly 10 percent. For the current fiscal year, the global provider of technology and services expects its sales to grow 3 to 5 percent. “We continue to move forward with our traditional business and are opening up new fields of business. In so doing, we are benefiting from our broad technological and industrial expertise,” said Dr. Volkmar Denner, chairman of the Bosch board of management, at the company's annual press conference. The Bosch Automotive Technology business sector continued its strong business performance of the previous year, growing impressively in the first quarter of 2014. “We have also seen clear growth in our other business sectors. With regard to the regions, business in Asia Pacific is developing especially well,” said Dr. Stefan Asenkerschbaumer, the Bosch CFO. Bosch also aims to further improve result in 2014.

Sensor technology – global market leader for the technology of the future
Internet-enabled products and internet-based services are one of the focal points of the company's future sales growth. With its hardware know-how and broad technological expertise, Denner believes Bosch is well prepared to move into this direction. “Bosch's traditional strengths – our innovative strength, high standard of quality, international presence, and the integrative force of our corporate culture – are also valuable in the connected world,” Denner said. Moreover, the company is global market leader in the area of micromechanical sensors (MEMS), a key technology when it comes to networking things on the internet. Bosch's strategic objective is to create solutions for connected mobility, connected industry, connected energy systems, and connected buildings.

Intelligent sensors – basis for the internet of things
Sensors enable a new form of technical assistance in day-to-day life. Describing the strategic significance of sensor technology, Denner said: “Whether we are speaking of automated driving or the smart home, a new quality of comfort, safety, and efficiency is developing, and Bosch is creating the technical conditions for this change.” In 2013, the market leader produced one billion micromechanical sensors. This year, a further 30 percent increase is planned. Intelligent sensors are the next level of technological progress. These are equipped with a radio interface and a microcontroller. As a result, sensors are able to transmit relevant data via the internet, for instance to mobile end devices. “Smartphones will not be the only devices to be equipped with sensors. Any 'smart' object will feature internet-enabled sensor technology,” Denner said.

Automated driving – also at higher speeds from 2020
Sensor technology is also a major technological prerequisite for future driving. Modern driver assistance systems require ultrasound, radar, and video sensors. This year, Bosch will produce nearly 50 million ultrasound sensors, 25 percent more than the previous year. The number of radar and video sensors produced will double to more than two million units. As early as 2016, sales of driver assistance systems will exceed one billion euros. By 2020, the company aims to enable automated driving at higher speeds on freeways. In the coming decade, fully automated driving using an autopilot function could become possible. “Automated driving is a technology that saves lives. At the same time, it can spark drivers' enthusiasm, since it offers them support with tiresome driving tasks,” Denner said.

Connected road traffic – new services
For driving to be automated, there has to be connected traffic as well as car-to-x communication. By 2025, almost every new car will be equipped with wireless data communication technology. Even now, the connected vehicle makes a broad range of services possible. In 2013, Bosch began offering its eCall emergency call system. When sensors record that a vehicle has had an accident, an automatic emergency call is made. Last year, the Bosch monitoring center processed a good 30,000 emergency calls. In the area of telematics, Bosch offers fleet management services for leasing and insurance companies. “For us, connectivity on the roads not only means efficiency and comfort, it also means safer driving,” Denner said.

Doubling sales in Asia and the Americas by 2020
Asia continues to be Bosch's number one growth region. By 2020, the company aims to double its sales in the region. For this reason, the level of capital expenditure will remain high. From 2010 to 2014, Bosch will have invested some 3.3 billion euros in the region. The company also aims to double its sales in North and South America by the end of the decade. In addition to expanding its manufacturing capacity, Bosch is strengthening its local development activities. In Guadalajara, Mexico, the company is currently opening a new development and software center. In Africa, too, Bosch aims to significantly increase its sales in the years ahead. In 2014, the company will further expand its presence on the continent. In Europe, Bosch aims to grow faster than the market despite the region's economic situation, which continues to be weak. As it expands its international presence, Bosch is also developing a growing number of products and services that are tailored to local customer needs.

The business year 2013 – improved sales and earnings
In fiscal 2013, Bosch increased its sales by 3.1 percent, to 46.1 billion euros (*based on an adjusted previous-year figure of 44.7 billion euros). The disclosed sales figure takes the exit from crystalline photovoltaics into consideration as well as consolidation effects resulting from changed accounting policies and acquisitions in the previous year. After adjusting for exchange-rate effects, sales grew 6.3 percent. As a result of negative exchange-rate effects to the tune of some 1.5 billion euros, the strong euro had a very negative impact on the sales figure. Excluding burdens from photovoltaics, Bosch disclosed a 6 percent EBIT margin. This translates into EBIT of 2.8 billion euros. The positive developments in the Automotive Technology business sector made a significant contribution to the improvement in result. “Also thanks to our many efforts to cut costs, we have taken an important step toward achieving our target EBIT margin of 8 percent,” Asenkerschbaumer said. Even including the extraordinary burden of 1.3 billion euros resulting from photovoltaics, EBIT margin increased to 3.2 percent. Bosch has discontinued the activities in the area of crystalline photovoltaics. The company has now sold most of its activities in this area. The sale of the remaining activities is planned to be finalized in the first half of 2014.

Headcount increased in 2013 – further workforce expansion planned in 2014
In 2014, Bosch expects headcount requirements to increase mainly in the Asia Pacific growth region. Altogether, some 9,000 university graduates will be hired around the world. In Germany, the company is planning to hire some 800 university graduates. The number of new apprentices in Germany will be same as the previous year, at around 1,400. In 2013, the Bosch Group's workforce grew by about 8,500, to 281,000 (*adjusted previous-year figure: 273,000).

Automotive Technology – strong growth around the world in all divisions
In 2013, the Automotive Technology business sector increased its sales by 6.7 percent (10.3 percent after adjusting for exchange-rate effects), to 30.6 billion euros. Its EBIT of 2.4 billion euros and EBIT margin of 7.7 percent were considerably higher than the previous year.

Industrial Technology – packaging machinery sales of one billion euros
In 2013, the Industrial Technology business sector's sales amounted to 6.8 billion euros, 9.2 percent below the previous-year level (down 6.5 percent after adjusting for exchange-rate effects). The difficult economic situation hit the Drive and Control Technology division especially hard. In contrast, the Packaging Technology division developed positively. Overall, the Industrial Technology business sector recorded a negative EBIT margin of 1.2 percent. EBIT showed a loss of 83 million euros.

Energy and Building Technology – connected products for smart heating
The Energy and Building Technology business sector increased its sales by 3.9 percent (5.9 percent after adjusting for exchange-rate effects) to 4.6 billion euros. The sector improved its result to some 106 million euros. Its EBIT margin came to 2.3 percent. In particular, the Thermotechnology division developed well.

Consumer Goods – market leader for innovative power tools
In 2013, the Consumer Goods business sector generated sales of 4.1 billion euros (note: as a result of changes to accounting policy, this figure includes sales of the Power Tools division only, plus some miscellaneous other sales). After adjusting for exchange-rate effects, sales were 2.9 percent higher than the previous year. In nominal terms, sales decreased slightly. The Consumer Goods business sector achieved an EBIT margin of 10.4 percent. Its EBIT of 415 million euros included the proportionate after-tax profit of the BSH Bosch und Siemens Hausgeräte GmbH joint venture. Even without this result, the business sector's EBIT margin was encouraging.

Europe – growth in a difficult economic situation
In Europe, Bosch sales grew despite the ongoing difficult economic situation. The company's sales in the region increased 2.2 percent (2.9 percent after adjusting for exchange-rate effects) to 25.5 billion euros. Sales increased slightly in Germany as well. Bosch invested 1.6 billion euros in Europe in 2013. Especially in eastern Europe, the company is currently expanding its manufacturing capacity. Last year, Bosch invested more than 900 million euros in Germany.

The Americas – strong growth in North America, recovery in South America
In the Americas, sales in nominal terms varied considerably in 2013. In North America, Bosch sales grew by 3.5 percent (6.8 percent after adjusting for exchange-rate effects) to 7.8 billion euros. This was in part the result of an increase in vehicle production. In contrast, sales in the South American market decreased by 3.6 percent, to 1.7 billion euros. However, after adjusting for exchange-rate effects, sales increased 8.9 percent. Bosch invested some 280 million euros in North and South America in 2013.

Asia Pacific – improvement in China, severe currency effects
In Asia Pacific, Bosch achieved sales growth of 5.8 percent (13.8 percent after adjusting for exchange-rate effects) to roughly 11.1 billion euros. Especially in the Chinese growth market, demand for automotive and industrial technology picked up significantly over the course of the year. Demand for automotive technology was also high in Southeast Asia. In India, poor economic conditions meant that business developed less well than forecast. The same applied to Japan. In 2013, Bosch again made considerable investments in Asia Pacific. With some 620 million euros spent, Bosch focused especially on expanding its manufacturing capacity for automotive components.

Research and development expenditure remains high
Last year, Bosch spent some 4.5 billion euros, or 10 percent of sales, on research and development. Bosch researchers filed nearly 5,000 patents over the course of 2013, some 20 per working day. The company plans to continue expanding its research and development capacity this year. By the end of 2014, Bosch will have some 45,000 researchers and engineers on board. More than 2,000 additional researchers will be hired in Asia Pacific, for instance. The company is also boosting its innovative strength in Germany, with a new center for research and advance engineering in Renningen, near Stuttgart.

Maintaining cutting-edge research – rapid transfer to industrial application
Denner, whose responsibilities on the Bosch board of management also include research and development, called for greater political commitment to promoting innovation: “Policymakers need to set their sights higher.” While Germany is close to spending 3 percent of GDP on research, the private sector has played a greater role in this achievement than the public sector has. Denner deplored the fact that universities were chronically underfunded. In some cases, he said, there was not enough money to pay for the buildings' upkeep. For him, the result was obvious: top researchers were leaving Germany in favor of research institutes in other countries. Denner went on: “In research and development, Germany and other European countries have to measure up to the world's leading countries.” He said that funding must above all benefit basic research, as well as its rapid transfer to industrial application. “Top universities make the regions they are located in more appealing. Companies indirectly benefit from this as well.” Bosch itself is an active member of 250 university research partnerships.

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