Automation/Business Pepperl+Fuchs CEO Gives Optimistic Outlook for 2012, Despite Debt Crisis

| Editor: Dominik Stephan

For Pepperl+Fuchs, the crisis seams averted: The company looks optimistically into the future, expecting a solid growth in 2012 as CEO Dr. Gunther Kegel explains. If these good numbers nevertheless result in a long term development depends on the development of the current sovereign debt crisis, Dr. Kegel believes

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"In Germany, we produce everything that is so new that nobody else can amke it – but also everything that is so old nobody else wants to!" said Dr. Gunther Kegel, CEO of Pepperl+Fuchs. (Picture: PROCESS)

Mannheim/Germany – “We have reason to believe that 2012 will be a year of good growth,” said Dr. Gunther Kegel, CEO of German automation company Pepperl+Fuchs yesterday at the company's headquarters press date in Mannheim. After initial forecasts in 2011 predicted a stagnating business activity, an increasing number of orders and turnovers indicate growth rates of seven to eight percent to be realistic for the firm, Dr. Kegel explained. The good figures of 2011 would, nevertheless, most likely be not achieved again, he added.

Strategy Shift from Components to Automation Systems

Pepperl+Fuchs, a German based automation company with global turnovers of € 370 million in 2010, currently employs around 4300 workers worldwide. Only recently, the company had announced a strategy change from being a sole producer of components to offering complete turnkey solutions tailored for its customers, Dr. Kegel explained. Integrating several components and modern bus technology, these systems would help Pepperl+Fuchs to stay in close contact with its customers.

Acquisitions are an Appropriate Mean to Generate Growth”

This strategic change is accompanied by the acquisitions of several solution providers, with the takeover of the former Siemens PX–business in 2010 being just one example. “Acquisitions are an appropriate mean to generate growth – also for medium sized companies,” Kegel explained. The company would nevertheless keep its focus on production orientation.

For its international subsidiaries, the company pursues a new turnover oriented strategy. The classic yield oriented approach has major flaws, since it invites different branches of a firm to battle for low transfer prices, a development that Kegel decribes as a “Left pocket, right pocket transaction.”

Kegel Optimistic for 2012 Despite Debt Crisis

Kegel is nevertheless optimistic that 2012 would bring solid growths for Pepperl+Fuchs: With new innovative solutions the company could generate turnovers especially on the emerging markets in Asia and Latin America. In these countries, Dr. Kegel believes, the acceptance for new technologies is quite high: “It is sometimes painful to see how hard it is to bring new technologies into established markets.”

Wether this strategy can help to face the threats of the recent sovereign debt crisis has yet to be proven. “With the latest bailout fund, the Eurozone has bought itself some time,” Dr. Kegel stated. “Wether this time will be used to solve the real problems, nobody can tell.” With the huge additional money that the bailout funds provided for the market at least the near future would look bright for automation suppliers, he explained.

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