With a rise in turnover of around 2% to €2.28 billion in the business year 2013 (2012: €2.24 billion), the Festo Group continued on its course of growth in a difficult environment of volatile global markets. Festo has thus grown more than 8 % per year over the past four years (2010 to 2013).
Adjusted for currency effects, the growth registered in 2013 amounted to more than 5%. Along with the pneumatics sector, important impulses were also given by the field of electric automation technology. For the coming years, the enterprise intends to achieve additional impetus in the core business, but also in electric automation technology and the process industry, in order to realise additional growth opportunities in these dynamic fields. In 2013 too, the development of global market supply in the growth regions of Asia and North and South America was further consistently pursued. At the focus of the entire reorientation is the ongoing development to a solutions provider for our customers. The customer derives “everything from the one source”, with the one goal: productivity. Festo is thereby orienting its structures, products and services towards the processes of its global customers to an ever greater extent.
Growth impulses arose in Asia (7,8 %*) and in Western (1,6 %*) and Eastern Europe (6,9 %*); growth was also registered in North and South America (Americas) (12,7 %*). Positive signals were received from the business segments of Electric Drives, Process Automation and the project area of Customer Solutions. In all high-focus industries, such as the automotive sector, food and packaging, electronics, biotech/pharmaceuticals and metropolitan solutions/water/wastewater, this year too customers are continuing to rely on Festo as a global development partner and provider of integral solutions.
The Didactic sector also registered a good year, with a growth rate of 6 %*. New growth opportunities are also arising in the training and qualification of young employees for future production worlds in the context of Industry 4.0.
New impulses for productivity in factory and process automation
“Pneumatics is of great importance to Festo, both now and in future. Just as in electrical automation, there are still great opportunities here for increased productivity. We are investing more than 7% from the turnover in the research and development of such smart and intuitive solutions for our customers. This also includes our diverse research activities relating to the various aspects of Industry 4.0,” explained Dr. Eberhard Veit, Chairman of the Management Board of Festo AG.
Also within the next few years, Festo as the innovation leader intends to keep setting the pace so that it can establish itself on an increasingly broad basis as a provider of integral solutions in pneumatic and electric automation technology. The family enterprise is undergoing intensive preparations for this development: “To be able to achieve such growth, we have restructured important areas. We have thereby initiated a process of change that is enabling our enterprise to react globally to future developments and market conditions in an anticipatory, flexible manner. We want to make our customers more productive. We are aligning our structures and processes with this objective,” Dr. Eberhard Veit explained.
A significant trend in this regard is the demand for cost-efficient overall solutions. Festo customers want integral solutions extending from small valves to entire systems, and from service to software, all from the one source. In the new structure, the Customer Solutions Business Unit will expedite the internationalisation and strategic orientation of customer-specific business. Festo also intends to gain further momentum in the fast-growing process automation market. “Many products from our core business bring about genuine innovations for the process industry, for example in the field of metropolitan solutions/water/wastewater. We see great opportunities for growth in this area,” Dr. Veit continued.
Investments in global growth markets
The customers of Festo are thinking and acting globally to an increasing extent. More and more significant growth is taking place outside of Europe. “We have therefore regrouped our marketing structures under the umbrella of a Global Sales Board. Customers throughout the world therefore receive the same high quality, service and consultation, since the requirements are increasing not only in Germany, but also in America and Asia,” Dr. Veit explained.
In order to meet these requirements, Festo is making investments – over US$40 million in America alone. In 2015 a new Production and Logistics Centre will be opened in Mason, Ohio on an a site measuring over 15,000 m2. The new Regional Service Centre (RSC) can accommodate additional growth in the USA, Canada and Mexico. “With the central location of the new RSC we can offer our individual customers in North America innovative solutions and even better service. This will further strengthen our position on the American automation market,” said Dr. Veit.
The automation market in China has been growing at record pace over the last few years. To participate in this growth and to increase its market share, Festo has been making major investments in China and has considerably extended its Technical Engineering Centre in Shanghai, which has been in operation since late 2013. The key to success in the Asian-Pacific region lies not only in a strong presence in the fields of production and logistics, but also in the development and realisation of sophisticated automation products and solutions. These are in keeping with the motto “In the region, for the region”. To this end, the Technical Engineering Centre (TEC) and the Greater China Solution Engineering Centre (SEC) in Shanghai offer products and solutions specially designed for the specific requirements of the Asian customers. A further milestone in this connection for the North Asian market was the opening of the Application Centre in Seoul in March 2013, which enables Festo to support customers’ projects from the stage of initial planning and feasibility tests up to the development of prototypes and the joint development and optimisation of products and systems solutions. The Centre will also play an important role in knowledge transfer and in the training and qualification of customers.
In Brazil’s economic centre São Paulo, Festo maintains close proximity to its South American customers with both a Global Production Centre (GPC) and a Technical Engineering Centre (TEC). The product range will be extended here over the next few years, and the factory will be enlarged.
Festo backs Germany as an industrial location
“Festo is not only making investments on an international scale; the company is also strongly backing Germany as an industrial location,” emphasises Dr. Eberhard Veit. Festo is now upscaling production at its headquarter, for example. While the headquarter in Esslingen – with the Automation Centre currently under construction there – is being even further extended into a development location for top technologies with investments amounting to some €38 million, the Technology Factory Scharnhausen near the head office is coming into being with state-of-the-art industrial engineering; the investment sum in this case amounts to some €70 million. As part of its long-term technology strategy, Festo is intensifying its competence in the field of polymer materials and is grouping together these activities in the Global Production Centre (GPC) Hassel at the Rohrbach (Saarland) location, under the name Festo Polymer GmbH. A total of €25 million has been invested in this new building complex. The production location in Saarland is also being extended in the fields of production and logistics with investments of around €15 million to accommodate the continuing growth in drive technology.
Festo as an employer: responsibility towards employees and society
The investments in new buildings and innovative working worlds also are benefitting the employees. Festo is one of the top employers in Germany and numbers among the top employers for engineers in Europe. For trainees, career beginners, young professionals, but also for experienced employees, the family enterprise offers ideal working conditions, career openings and the opportunity for lifelong learning and for further education in internal and external courses. Social responsibility has many facets for the company. It bases its actions on an overall perspective, while relying on its own corporate culture and its firmly established values. Festo cares for the new generation of employees not only in its country of origin, for example. The company already took on three trainees from the Iberian Peninsula in 2013 and gave them the chance of a secure future at a time of insecurity. Last year, a total of around 100 trainees and bachelor students embarked on their education at Festo in Germany – a solid start for the future. The global workforce grew in 2013 to 16,700 employees (previous year: 16,200), including 7,700 (previous year: 7,400) in Germany and 9,000 (previous year: 8,800) abroad.