Tuesday, December 21, 2010

SMS group emerges from the crisis stronger than before

After a collapse in 2009, order intake by the SMS group has rallied in the current business year and looks likely to reach EUR 2.8 to 2.9 billion. However,that is still way below the target of EUR 3.5 billion or more.

The market for plants from Business Area SMS Siemag recovered slightly from the middle of 2010,but still lags far behind the pre-crisis level.

Due to its broader diversification, Business Area SMS Meer managed to weather the recession better. However, despite a satisfactory order situation, the market here has not yet reached the level of 2007/2008.

Sales of the SMS group in 2010 will total some EUR 3.1 billion (previous year: EUR 3.9 billion).

While the old industrialized countries are not yet investing in new plants, but focusing on revamps, the emerging economies are resuming their drive for industrialization as more and more of them overcome the credit crunch.

Above all india and Brazil, as well as smaller Asian, South American, and Middle Eastern countries are ordering new metallurgical plant and –increasingly- aluminum plants. In China, project activity is lower because the country built up huge capacitics in recent years.

The short work in some areas of SMS Siemag that was necessary to cope with the crisis has already been reversed. Now, the production and design teams only face sporadic periods of under-capacity up to the middle of 2011.

Business Area SMS Meer is fully booked well into the coming year.

Enhanced competitiveness

‘’Despite some slow periods this year, we have been able to keep our experienced core personnel on board throughout the crisis,’’ says Dr. Heinrich  Weiss,  Chairman & CEO of the SMS group. ‘’At the same time, we used the spare capacity to concentrate on technological development and rationalizing our processes. We massively increased investment, so we also made the most of low prices for investment goods.

As part of this strategy, Business Area SMS Meer in October in-augurated a new workshop in Shanghai constructed at a cost of some EUR 22 million.

Right now, one of Europe’s most modern heavy machinery construction shops is taking shape in Hilchenbach, Germany, the seat of the family company founded more than 140 years ago. At the same location, a new training workshop costing some EUR 4 million opened in June 2010.

The SMS group companies have advanced their technological development especially in terms of eco-friendly and energy-saving plant design to give their customers an even sharper competitive edge.

Heinrich Weiss says: ‘’Our innovation power, our experienced core staff with continually increasing know-how, as well as our cautious financial policy that keeps us independent of banks have in the past two years given us the ability to emerge from this crisis stronger than before.’’

Investment in training-beyond economic cycles

To preserve its leading market position, the SMS group depends on constant innovation and highly qualified employees. Unaffected by the crisis, the trainee quota at the group companies in Germany  remained at some seven percent of the total workforce. That is higher than the average in the industry. Close ties with schools and universities, study support schemes, special introduction programs for young engineers, and the SMS-Akademie with a broad range of educationl activities for all employees are proof of the high value the company places on training and personal development. Currently, the number of employees in the group worldwide totals some 9,000.

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