Bosch Rexroth Expresses Future Optimism with 2007 Results
The unsure economic situation was far from avoided by Bosch Rexroth President and CEO, Berend Bracht, in his news and strategy update for the company, which he delivered via webcast in April. Despite the U.S. economic factor, Bracht expressed a positive outlook for 2008 based on the company’s 2007 year-end results. The sales and expansion numbers for the company demonstrated healthy gains, and Bosch Rexroth is responding with expanded business and production initiatives.
Total sales have grown by 50 percent since 2002, without contributions from major acquisitions. Asia served as a key to growth in 2007, increasing sales by 13 percent, which is twice the region’s business volume since 2002. China was the largest contributor to sales in Asia, experiencing an approximate 30 percent increase. Sales also increased in other regions such as Western, Central and Eastern Europe.
Bosch Rexroth sales declined by 5.5 percent in North America, mostly due to the state of the dollar and weakness in the Canadian manufacturing sector. “The good news came from South America, where we achieved a phenomenal 18.5-percent increase in sales, making it one of the company’s fastest growing regions,” Bracht says.
While acknowledging the lack of U.S. economic improvement and the expectation that the situation will remain negative, Bracht expressed confidence that Bosch Rexroth would benefit by growth-oriented industries like renewable energy, semiconductor and medical areas. Renewable energy in particular has only begun to expand, but the Global Wind Energy Council projects a 20 percent growth Bracht expects to materialize. Bosch Rexroth has increased sales in machine tool, woodworking, packaging and heavy industries. Mobile hydraulics is another area that expanded in 2007.
The Bosch Rexroth global workforce may have seen the most significant area of growth, increasing by 3,150 employees with new jobs in Germany, the Americas, Central and Eastern Europe and Asia. This is a 10 percent growth, with the company now employing almost 33,000 people worldwide.
In recognition of the global demand for young and upcoming engineers and technical workers, Bosch Rexroth has been involved with various educational insititutions including Texas A&M, Illinois State University, Tri-County Technical College in South Carolina and Lake Superior State University in Michigan. “Young people are very much aware of these activities. Through survey results—as in previous years— Bosch Rexroth has again been placed high on the list of the most attractive employers,” Bracht says.
Investments were made in 2007 that went towards new buildings, plants and machinery representing $517 million. The majority of this 7-percent sales reinvestment went towards global networks and promising up-and-coming markets. Bracht mentioned a new $247 million plant in Germany that will be developed over the next few years, which will manufacture large gear systems for wind farms. American investments in 2007 included the “addition of a 50,000-square-foot logistics center at our industrial hydraulics manufacturing plant in Bethlehem, Pennsylvania,” Bracht says. “Another 25,000 square feet is planned for 2008, to add production capacity for mobile controls.”
Research and Development is another area Bosch Rexroth invested significantly in last year. The $343 million spent in R&D helped result in several energy-conservation developments in standard production with projects that limit fuel consumption in mobile machinery, increase factory automation efficiency and plant upgrades for renewable energy generation. In a news and strategy update broadcasted by webcast, Bracht drew special notice to future prospects for solar energy. “Rexroth is deeply involved in this emerging technology, from grains of sand to the manufacture of solar panels, to the positioning of finished assemblies,” he says.
Many of the business initiatives Bosch Rexroth employed in 2007 will be pursued next year as well. The company expects to increase investments in worldwide production, adding production capacities and expanding its position in the global hydraulics industry. While heeding the potentially negative effect a weak U.S. economy will have on worldwide growth, Bracht predicts a sales increase in the double-digit percentage for 2008. “We are optimistic about our growth in North America because of our major new initiatives in alternative energy and factory automation.”