- Prospects good thanks to high order intake
- Sales in 2014 up by a nominal 6.3 percent to 1.18 billion euros
- Order intake around 11 percent higher than in 2013
- Connected industry and line competence constitute main growth drivers
Bosch Packaging Technology, a leading supplier of process and packaging solutions, remained on a growth path in 2014. The Bosch division's sales revenue for the fiscal year increased by 70 million euros to around 1.18 billion euros, which corresponds to a nominal growth rate of 6.3 percent. This once again places the manufacturer of special-purpose machinery above the industry average of 4 percent, according to Germany's VDMA industry association. Adjusted for currency effects the sales increased by 6.7 percent. The division's order intake reached the record level of 1.23 billion euros, which is around 11 percent higher than in 2013. At the end of 2014, Bosch Packaging Technology employed a total of 6,100 associates at more than 30 locations around the world, which represents a year-on-year increase of around 7.7 percent. Friedbert Klefenz, president of Bosch Packaging Technology, expects to see further substantial growth in sales revenue in 2015.
Overall positive outlook for 2015
"The results achieved in the first four months of the current fiscal year give us every reason to be optimistic. Our proximity to customers and markets has enabled us to obtain a higher volume of orders compared with the previous year. This serves as the basis to reach our defined sales targets," Klefenz said. The recent acquisition of Osgood Industries, a supplier of food packaging systems in the United States, and the establishment of a joint venture with Klenzaids, an Indian company specializing in processing, packaging, and cleanroom technology for the pharmaceutical industry, will be a contributory factor. The overall target is to grow significantly faster than the market, as Klefenz declared during a press conference at the Achema 2015 World Forum in Frankfurt.
Growth in Europe and North America, major projects in Central America
In 2014, Bosch Packaging Technology made moderate progress in the European market, and achieved high double-digit growth in North America. In the free trade zone created by the North American Free Trade Agreement (NAFTA), the company benefited first and foremost from substantial orders placed by its customers in the food industry. Business with manufacturers of pharmaceutical products is also moving forward, with increasing demand for machines for the production, filling, and packaging of pharmaceutical products. Sales have also been developing well in Africa and the Middle East, with revenues rising by a percentage in the mid-single-digit range.
2014 was a year of mixed sentiments as regards the development of Bosch Packaging Technology's business in Central and South America. On the one hand, the Pharma business unit reported a double-digit increase in sales to pharmaceutical companies in Central America, with further prospects for growth thanks to a major contract. This relates to a reference project in which Bosch designed, supplied, and installed special-purpose machines for an interlinked industry solution consisting of multiple production lines. Soon the customer's new, ultramodern factory will be capable of producing and packaging over 450 liquid and solid pharmaceuticals. On the other hand, sales to customers in the food industry in Central and South America were lower than in 2013. This result is mainly due to the depressed economic situation in these regions.
Exceptionally slow developments in Asia
In 2014, progress was unexpectedly weak in the markets of the Asia-Pacific region, where Bosch Packaging Technology reported lower sales than in 2013. Nonetheless, the outlook for 2015 is positive, not least because the company has developed high-quality products to suit local needs. These machines are competitive in terms of both costs and functionality compared with similar machines offered by Asian companies. As a result, the volume of new orders in China has picked up in the first quarter of 2015, despite the slower economy. Bosch recently strengthened the presence of its Packaging Technology division in India by acquiring a 49-percent equity share in the Indian company Klenzaids. "This investment represents an important step forward in our efforts to gain a stronger foothold in this region," Klefenz said. Klenzaids is best known as a manufacturer of cleanroom equipment for the pharmaceutical industry.
Strategy PA 2020: Expanding markets and business fields
The objective of the Bosch division's "Strategy PA 2020", presented last year, is to increase market share and expand the number of business areas. Although the growth regions of Asia did not develop as well as expected in 2014, Bosch Packaging Technology still aims to generate one third of its sales in this region by the year 2020. At present, Asia accounts for 23 percent of total sales. The company also aims to expand its business in Africa, Latin America, and the Middle East. The Bosch division currently has a presence in four countries on the African continent: Egypt, Nigeria, Kenya, and South Africa. In Europe, which is still the division's largest market, accounting for 43 percent of total sales, and in North America, which currently accounts for 25 percent of total sales, the company aims to grow faster than the market.
"In 2014, the two business units Pharma and Food generated roughly equal sales levels. We intend to keep things this way, with sales equally divided between the two units. They both offer great potential for growth. Within the food sector, our primary objective is to significantly increase sales of process and packaging technology for liquid food between now and 2020," Klefenz said. Another area with considerable potential is the market for so-called consumables. One example in the field of food packaging is the use of aroma protection valves to preserve the full flavor of coffee. These valves allow gases to escape from the packaging without letting any oxygen in. In the field of packaging for pharmaceuticals, the application of single-use systems in filling machines for highly potent medicines enhances customer benefit, because they prevent the loss of active ingredients, reduce costs, and shorten processing times.
Connected industry and line competence
"Across all business units, connected industry and line competence are our two major growth drivers," Klefenz declared. By interconnecting different stages of the manufacturing process on a broad scale, it becomes possible to optimize the integration of all links in the value chain and to assure and enhance the operating efficiency of the machines and the quality of the products. This gives rise to the associated benefit of greater production flexibility, for instance by enabling a wider range of products to be manufactured on a single production line. At the same time, the concept of connected industry is the key to improved service. For Bosch Packaging Technology, this means for example that it can provide prompt, efficient support to its customers via the Remote Service Portal. A secure data link is used to transmit the necessary data between the customer's machines and the Bosch Remote Service Center.
Line competence means widening the focus from a single machine to the entire production line – enabling aspects such as material flow logistics and all upstream and downstream process steps to be taken into account. Bosch has already implemented many different projects based on integrated process and packaging lines, for example in Russia, North Africa, and the Americas. The lines in question handle both liquid and solid pharmaceuticals.
Packaging technology for a better quality of life
The Bosch exhibit at Achema 2015 (Hall 3, Booth C71) features five line solutions for the processing and packaging of therapeutic drugs used to treat patients suffering from diseases such as cancer and diabetes. "The message we wish to transmit to our customers, who have already invested years of effort to develop their pharmaceutical products, is that we always have their interests at heart when we design such complete solutions," Klefenz said. He added, "It is and remains one of our key objectives to preserve the quality of medicinal products and thereby improve peoples' quality of life. Innovative packaging technologies are one way of ensuring that drugs are delivered safely and without contamination, and that they can be administered as simply as possible."
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