the german machinery & equipment industry 2013 market ...04.10.2013 | market leadership powered...

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The German Machinery & Equipment Industry 2013

Market leadership powered by German engineering

Marko Kolbe

Senior Manager, Mechanical and Electronical Technologies

Germany Trade & Invest GmbH

October 2013, World of Energy Solutions, Stuttgart

04.10.2013 | www.gtai.com 2 Market leadership powered by German engineering

1. The German Machinery and Equipment Industry

2. Market Trends and Business Opportunities in Germany

3. The Advantages of Germany as an Investment Location

4. Business Projects along the Value Chain

5. About Germany Trade and Invest

Agenda


The German Machinery and Equipment Industry

Worldwide machinery turnover – top 10 countries (2011)

Source: VDMA (2012), (*figures for 2011)

4

1

3

2

5

7

8

China EUR 563 bn

(+15%)

Japan EUR 292 bn

(+12%)

6 South Korea

EUR 65 bn (+8%)

Germany EUR 230 bn

(+14%)

USA EUR 276 bn

(+7%)

Italy EUR 107 bn

(+8%)

France EUR 49 bn

(7%)

Brasil EUR 38 bn*

India EUR 40 bn*

Great Britain EUR 43 bn (+10%)

10

9



Comparison of the German Machinery and Equipment (M&E) Industry

with other industrial sectors

0

100

200

300

400

500

600

700

800

900

1000

Employees 2011 (annual average in 1,000)

Employees 2012 (annual average in 1,000)

0

60

120

180

240

300

360

2011 turnover (in EUR bn)

2012 turnover (in EUR bn)Total 2011: 2,248

Total 2012: 2,262

1400

Machinery & Equipment annual turnover in

comparison to other industrial sectors

+3.8%

0.0%

-4.0%

+3.0%

+1.5%

+0.4%

+1.2%

+0.7%

+1.2%

+4.3%

+1.9%

+2.5%

Machinery & Equipment employees in

comparison to other industrial sectors

*without information technology, Source: VDMA 2012

Total 2011: 2,248

Total 2012: 2,262



The Germany Machinery and Equipment (M&E) Industry is back on track

with expected Record Turnover and Export World Champion Title

German M&E Annual Turnover Growth

2003-2013 (in EUR Billion)

Source: VDMA 2012

0,0

5,0

10,0

15,0

20,0

25,0

Year

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Germany

USA

Japan

Italy

China

Machinery World Trade Share by

Supplier Country (in %)

133 143

151

167

190

208

161

173

201 207

217

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013



Germany is Export World Champion in the Machinery and Equipment

(M&E) Industry

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Power transmission engineering

Materials handling technology

Construction equipm. and building materials machinery

Air-handling technology

Machine tools

Food processing machinery and packaging machinery

Agricultural machinery

Valves and fittings

Precision Tools

Compressors, sompressed ait and vacuum techn.

Export volume in EUR billion

The Global Market Share of the 10 largest M&E Sectors in Germany 2012

(Total export volume, world export share, world market position)

Source: VDMA 2012, GTAI Research 2013

21,7% (1)

20,4% (1)

10,5% (3)

11,7% (2)

18,1% (2)

21,8% (2)

17,7% (1)

13,7% (2)

15,4% (1)

16,0% (1)







Agenda


Market Trends & Business Opportunities in Germany

(1) Germany’s highly industrialized environment

Electronics Electronics is the world’s fastest growing industry About 850,000 highly-skilled employees generate

total revenue of EUR 167 billion in 2012 New technologies i.e. flat panel, flexible displays,

and printed electronics

Source: GTAI research 2013; VDMA 2012; Photos: BASF AG, Gerolsteiner Brunnen, ZVEI, BMW Group

Automotive

The automotive industry represent Germany’s largest industry in revenue terms (EUR 274 billion in 2012)

Large-scale production in over 1,000

companies with 694,000 employees

Chemicals

Germany leads within Europe with total revenues of EUR 113 billion in 2012 Sixty highly developed chemical parks represent an optimal base for chemical processors, refiners, and producers of end products

Food & Beverages The industry accounts for revenues of over EUR 136 billion in 2012 Robust competition within the food retail market has led to high automation standards in production – standards which can be found only in Germany.



(1) Sales development of the 10 fastest M&E sub-segments in the last

10 years (Total growth and CAGR)

Source: VDMA 2012, GTAI Research2012

Sales Development of the 10 Fastest Growing M&E sub-segments 2011/2001

(Total CAGR in percent)

0 50 100 150 200

Robotics & Automation

Food Processing / Packaging Machinery

Fluidpower

Power Transmission Engineering

Construction Equipment / Building Machinery

Engines and Systems

Agriculutural Machinery

Compressors, Vacuum Technology

Power Systems

Mining Equipment

04.10.2013 | www.gtai.com

(2) Germany’s New Energy Concept (2010) // Energy Efficiency

M&E as key for the Environmental Technology Industry


Energy efficiency measures

Increase in energy productiveness 2.1% p.a.

Reduction of energy consumption -50% (2050 vs. 2008)

Reduction of electricity consumption -25% (2050 vs. 2008)

Renovation rate 2% p.a.

Reduction of energy for transportation -40% (2050 vs. 2005)

Climate protection measures 2020 2050

CO2 cuts vs. 1990 -40% -80%

Renewable share of… 2020 2050

Total energy consumption 18% 60%

Electricity consumption 35% 80%

Heat generation 14% 60%

10

Source: BMBF 2012

04.10.2013 | www.gtai.com

(3) Germany’s Smart Factory // Industrie 4.0

M&E as key for the Fourth Industrial Revolution


11

Germany‘s role in Industry 4.0 What is Industry 4.0 ?

Objectives of Industry 4.0

4th industrial revolution:

autonomous embedded systems

Cyber-Physical Systems (CPS):

machines, storage and production

facilities exchange information,

trigger actions and control each

other independently. Industrial

processes become more vertically

integrated and can be managed

more efficiently and flexible

Products in „Smart Factories“ are

always traceable. Operational and

embedded production processes are

horizontally linked and controllable

in real time – from order to supply

Continuous engineering over the

whole life cycle becomes possible.

Germany benefits from its strong traditional industry base

Market leadership in many machinery segments, innovation pioneer in embedded systems and industrial IT, esp. Machinery & Automotive

Germany wants to become cyber-physical systems lead provider by 2020 (High-Tech Strategy): € 200 Mio

Self-organizing, Adaptive Logistics

Networked Production

Customer-Integrated

Engineering

Resilient Factory

Technology Marketplace

Intelligent Maintenance

Source: Acatech 2013; Industrie 4.0 Platform http://www.bmbf.de/pubRD/Umsetzungsempfehlungen_Industrie_4.0_final_2012-10-02.pdf

http://www.bmbf.de/pubRD/Umsetzungsempfehlungen_Industrie_4.0_final_2012-10-02.pdf












Agenda


Advantages of Germany as an Investment Location

Leading Economy

Global Player

High Productivity

Excellent Workforce

Power of Innovation

First-Class Infrastructure

Inviting Incentives

Competitive Tax Conditions

Secure Investment Environment

Quality of Life 10

8

6

4

2

9

7

3

5

1



Source: The German Federal Environment Ministry Source: VDMA (2012)

GDP of G8-Countries by Sector

(2012, in %)

Development of Industrial production

sales in selected countries (2012)

Germany’s share of GDP from industrial production is comparatively

high, making Germany the largest manufacturer in Europe.

Note: *refers to EU-28; Source: IMD 2012, Eurostat 2013

19,0

19,3

21,7

24,2

28,7

30,1

30,5

36,0

79,0

79,6

77,0

73,8

69,3

68,3

68,5

60,1

0 50 100

France

USA

United Kingdom*

Italy

Canada

Japan*

Germany

Russia

Agriculture Industry Services

*2011 data



Largest Industry Sectors by Number of Employees* (30.6.2011, per 1,000)

With a share of 22.5% of all employees and more than 250,000

companies, manufacturing employs the most people in Germany.

Note: *Includes full-time and part-time employees. Source: Federal Statistical Office 2013

1.001

1.091

1.454

1.637

1.646

1.673

1.996

3.587

4.090

6.396

0 1.000 2.000 3.000 4.000 5.000 6.000 7.000

Financial and Insurance Activties

Education

Transportation and Storage

Construction

Professional, Scientific and Technical Activities

Public Administration and Defence; Compulsory Social Security

Administrative and Support Service Activities

Human Health and Social Work Activities

Wholesale and Retail Trade; Repair of Motor Vehicles and

Motorcycles

Manufacturing

Total employees: 28.4 million



Stable labor costs and a well trained, highly motivated workforce are

among the decisive factors for Germany’s competitiveness.

Average Annual Growth of Labor Costs* in Manufacturing (2003-2012)

Note: *Labour cost for LCI (compensation of employees plus taxes minus subsidies) Source: Eurostat 2013

6,6

6,2

5,7

5,3

3,7

3,4

3,4

3,0

2,9

1,9

-0,1

-1,0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0

Hungary

Slovak Republic

Poland

Czech Republic

Spain

France

United Kingdom

EU-28

Netherlands

Germany

Greece



Stable labor costs and a well trained, highly motivated workforce are

among the decisive factors for Germany’s competitiveness.

Industrial Labor Costs (2011, per hour in EUR)

Note: Please be aware of strong labor cost/salary variations within German regions. For detalied salary information, please contact your Germany Trade & Invest consultant. Source: Institut der deutschen Wirtschaft Köln, 2012

52,61

44,96

40,66 40,46 37,64 37,57

35,91 35,66 32,88

27,46 26,45 23,81 23,12 22,42 21,88

9,99 8,51 7,35 6,46

3,73 2,82

0,00

10,00

20,00

30,00

40,00

50,00

60,00



Germany is a major global R&D player. Germany’s federal states R&D

expenditures correspond with that of other European countries.

Source: VDMA (2013); Note: For 2012 only forecasts available; Source: OECD 2013 according to OECD, UNESCO 2012 (right)

Global Top 10 - R&D Expenditures

(2011, in EUR bn)

19,7

20,4

21,7

27,3

31,0

44,9

73,6

96,6

128,5

298,3

0,0 100,0 200,0 300,0 400,0

Italy

Australia*

Canada

Korea*

United Kingdom

France

Germany

China

Japan*

USA

Global Top 10 - R&D Expenditures

(2011, in EUR bn)

German Machinery & Equipment Innovation

Expenditures 2006-2012 (in EUR bn)

8,1 8,8 9,6 8,8 9,1 9,6

12,8

3,1

3,3

4.0

2,7 2,6

3,1

5,8 5,6 6.0 6,3

5,6 5,4

0

2

4

6

8

10

12

14

16

2006 2007 2008 2009 2010 2011 2012

investment-related innovation expenditures

ongoing innovation expenditures

percentage of innovation expenditures to turnover



Compared to other nations, Germany’s high-tech industries contribute a

higher share to the gross value added.

Share of High-Tech Industries of Gross Value Added (in %, 2010)1

Source: German Institute of Economic Research (DIW) 2013; Note: 1High-tech industries are characterized by high internal R&D expenditures of between 2.5%-7% of the average OECD turnover; Cutting-edge technologies show an internal R&D intensity of more than 7% of the average OECD turnover

3,9

2,2

1,6

1,1

3,4

3,0

0,7 0,6

1,8

0,9

0,5 0,4

1,8

1,2 1,1

0,9

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

Germany Japan EU-14 USA

Machinery Automotive Electrical Equipment Chemicals



Germany is Europe’s number one and one of the global leaders in

creating innovations for the future.

Patents Granted at the European Patent Office (2012, in absolute numbers)

Source: European Patent Office 2013

7

12

19

50

62

330

1.735

2.668

4.810

10.294

13.407

15.090

0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000

Slovak Republic

Poland

Czech Republic

China

Hungary

Spain

Netherlands

United Kingdom

France

Japan

Germany

USA



R&D Excellence // Germany’s top innovation clusters - Kompetenznetze

Universities, research centers and companies

establish interdependent relations with access to

technology and supplier networks, creating

innovative value chains.

Collaboration between industry and research is

improved and foreign investors can find information

and project partners for R&D.

The Clusterplattform Deutschland provides

information on cluster policy measures, as well as on

upcoming events, and essentially serves to facilitate

access to the individual initiatives. It also encourages

a mutual and intensive exchange of information and

experience relating to the measures, their

development, and impact.

Selected M&E industry-related innovation

clusters in Germany

Source: Fraunhofer Innovation Clusters, GO-CLUSTER Initiative

http://www.clusterplattform.de/en



Germany offers different incentives packages to reimburse an

investment project’s expenditures.

1 only available in Eastern Germany

Incentives Available to Investment Projects in Germany

Incentives

Operational Incentives Package

R&D Incentives Labor-Related

Incentives

Training Support

Recruitment Grants

Silent / Direct Partnership

Loans

Wage Subsidies

State Investment

Grant

Cash Incentives Interest-Reduced

Loans Public

Guarantees

KfW Loans (National Level)

Investment Allowance1

State Development Bank Loans

Combined State/ Federal

Investment Incentives Package +


To reduce capital expenditures, Germany offers Investment Grants of

up to 50 percent, depending on the region and the company size.


Notes: 1 Includes a bonus of 20%, 2 Includes a bonus of 10%, ³ “De-minimis-rule“ Source: Joint Task Framework Plan

“Improving the Regional Economic Structure“ from 2009

The bonus of 20% for a small enterprise and of 10% for a medium-sized

enterprise is not granted to large investment projects with eligible investment

costs > EUR 50 million. An additional aid intensity reduction would apply in

these cases.

Small companies1

Medium-sized companies2

Large companies

A Region 50% 40% 30%

A Region in transition 40% 30% 20%

C Region 35% 25% 15%

D Region 20% 10% max.

EUR 200,0003

C/D Region 35% / 20% 25% / 10% 15% / max.

EUR 200,0003







Agenda


Top 20 Destination Countries by Number of FDI Projects (2008-2012*)

USA and China have been the most attractive markets for investors from 2008 to

2012. Also Germany continues to be one of the favored investment locations.

Source: fDi Markets, June 2013, Note: FDI projects refer to greenfield and expansion investment projects. M&A projects are not included; *preliminary data for 2012

Business Projects along the Value Chain

952

1.097

1.132

1.237

1.260

1.470

1.528

1.534

1.592

1.759

1.895

1.959

2.146

2.161

2.172

3.669

4.244

4.943

6.679

7.135

1.000 2.000 3.000 4.000 5.000 6.000 7.000 8.000

Malaysia

Thailand

Vietnam

Hong Kong

Romania

Canada

Australia

Mexico

Poland

Singapore

Brazil

UAE

Spain

France

Russia

Germany

India

UK

China

United States

www.gtai.com

Projects ranked in Germany by country

(2008-2012*, total number and rank)

Projects in Germany by Sector (2008-

2012*)

Germany as a Business Location

October 4, 2013 26 Germany's Major Investment Partners

The USA have invested 23% of all FDI Projects in Germany since 2008.

The biggest share of FDI projects has been located in ICT & Software.

Source: fDi Markets, June 2013

Note: FDI projects refer to greenfield and expansion investment projects. M&A projects are not included; * Preliminary data for 2012

1.121

29

44

51

65

75

106

125

184

196

230

285

318

840

0 200 400 600 800 1.0001.200

Other countries

Poland

Republic of Korea

Russia

Canada

India

Sweden

Spain

Japan

Netherlands

France

China

UK

USA

23

17

15

14

13

10

87

65

42

1

ICT &

Software 17%

Business &

Financial Services

15%

Automotive,

Industrial Machinery & Equipment

14%

Consumer

Goods (incl. Food &

Beverages) 13%

Textiles

11%

Chemicals,

Plastics, Paper 6%

Electronics &

Semiconduc-tors 5%

Energy,

Minerals,

Metals 5%

Transpor-

tation, Storage & Logistics

5%

Healthcare

(Medical Devices &

Pharmaceu-ticals) 4%

Real Estate

3% Others

2%


www.gtai.com

Business Projects along the Value Chain

100

200

300

400

500

600

700

800

900

Destination of M&E Investments

within Europe (2008 – 2012)

Country of Origin of M&E Investments

into Europe (2003 - 2012)

Germany ranks first within Europe as destination country and second as

country of origin for M&E investments

Source: fDi Markets 2013 , GTAI Research, 2013

Segment M&E, 2003 – 2012; Listed projects fDi Markets (3,191) Segment M&E, 2003 – 2012; Listed projects fDi Markets (3,191)

50

100

150

200

250

300

350

400

Segment M&E 2008-2012; Listed projects fDi Markets (1,858)







Agenda


Company Tasks

The foreign trade and inward investment promotion agency of the

Federal Republic of Germany

About Germany Trade and Invest

Investment Attraction

Location Promotion Export Promotion

German Parliament Resolutions for Founding/Financing

Federal Government

BMWi - Shareholder BMI


Germany Trade & Invest…

supports export-oriented companies based in Germany with comprehensive foreign market information.

promotes Germany abroad as a high-performance economic and technology location in order to attract investors who create/secure jobs in Germany.

consults potential foreign investors in terms of their settlement plans and realizes the required project management support in Germany.

Germany Trade & Invest is the foreign trade and inward investment

promotion agency of the Federal Republic of Germany



www.gtai.com

Two Headquarters in Germany - 48 Locations Worldwide


Chicago New York San Francisco Toronto Washington D.C.

Buenos Aires Bogotá Mexico City Santiago de Chile Sao Paulo

Athens Brussels Helsinki London

Madrid Milan Paris Stockholm The Hague

Dubai Istanbul

Cairo Johannesburg Nairobi Tunis

Almaty Belgrade Budapest Bucharest Kiev Moscow Prague Warsaw Zagreb

Bangkok Beijing Hanoi Hong Kong Jakarta Kuala Lumpur Mumbai New Delhi Seoul Shanghai Taipeh Tokyo

Sydney

Jerusalem

Berlin Bonn


www.gtai.com


AHK-Cooperation AHK Offices

GTAI Offices

Joint offices


Project Management Assistance

Location Consulting/Site Evaluation

Project partner identification and contact

Business opportunity analysis and market

research

Market entry strategy support

Joint project management with regional development

agency

Coordination and support of negotiations

with local authorities

Final site decision support

Site preselection

Identification of project-specific location factors

Cost factor analysis

Site visit organization

Organization of meetings with legal advisors and financial

partners

Identification of relevant tax and legal issues

Project-related financing and

incentives consultancy

Administrative affairs support

Accompanying incentives

application and establishment

formalities

Decision & Investment Evaluation Strategy

Support Services

Complete your project management needs from our range of investment

and one-stop project consultancy services.




Germany Trade & Invest serves as a consultant to the investing

company with German expertise, supported by the federal states.

Consulting Services

Discussion of location proposals

Introduction to potential customers, partners, suppliers

Discussion of the business model and market entry strategy

Advising on the financing of the project (including incentives)

Assistance in applying for incentives

Discussion in the international competition of possible locations

Assistance in consultation with licensing authorities

Discussion on the market and competition in Germany and Europe

Investor



The Investor Support Services team advises on legal, tax, and financing

issues. Special focus is placed on the promotion of Germany as an

investment location.

Picture Credits: © BWE/Christian Hinsch; BMVBS/Amin Akhtar; Copyright Dreadlock/Fotolia; BSW/Paul Langrock

Renewable Energies & Resources

Chemicals & Healthcare

Service Industries

Mechanical & Electronic Technologies

Investor Support Services

Request

Industry Teams

Financing & Incentives

Tax & Legal Services


Case Study: MetoKote Corporation (Mannheim, Baden-Württemberg)

Founded in 1969, >250 employees; Lima, Ohio - USA

Operates more than 150 coating systems that serve over 1,000 customers in nearly 40 facilities worldwide

Industry: Protective Coating Solutions for different industrial customers (automotive, agricultural equipment, machinery production)

Pilot project realized in Germany focused on reaching further customers in continental Europe

Investment: > EUR 6.5 million

Land area: 11,5000 m² (+12,500 optional)

Product: Coating applications

New employees: 53 (2012)

First contact with Germany Trade & Invest: March 2007

Factory opening: June 2010

2013: Established production site according to MetoKote’s global regional coating center concept

Company profile (prior to investment)

Milestones

Project data

Product and location

1

2

First meetings with potential German customers June 2007

2 Closing contract with key customer John Deere Mannheim

Sept 2009

3 Oct 2009 Final site selection

Nov 2010 Start of construction 4

5 Begin equipment move-in March 2010

Production ramp-up June 201 6


Production site established 2013 6


Case Study: GA Pack (Halle, Saxony-Anhalt)


Incorporated in 2001, >700 employees HQ in Gaotang, Shandong province (China)

Leading alternative supplier of aseptic packaging in the PRC & second-largest supplier of roll-fed aseptic packaging worldwide

Industry: Aseptic Packaging: Sealed, sterile containers filled by sterile food and beverages under an aseptic environment

Investment: > EUR 50 million

Annual capacity: > 4 billion packages

Jobs created: 110

First contact with Germany Trade & Invest: March 2010

Start of construction: July 2011, start of production: 2nd half of 2012

Company profile (prior to investment)

Project Data


Thank you for your Attention!

For further information, please contact us:

© 2012 Germany Trade and Invest GmbH All information provided by Germany Trade and Invest has been put together with the utmost care. However we assume no liability for the accuracy of the information provided.

Mr. Stefan Di Bitonto

Manager

Transportation Technologies

T. +49 30 200 099 401

[email protected]

Ms. Peggy Görlitz

Senior Manager

Machinery & Equipment

T. +49 30 200 099 602

[email protected]

Beijing Office

Mr. Markus Hempel

China Representative

Beijing, China

T. +86 10 6539 6725

F. +86 10 6590 6167

[email protected]

Mr. Marko Kolbe

Senior Manager

Transportation Technologies

T. +49 30 200 099 405

[email protected]

Chicago Office

Mr. Emilio Brahmst

Senior Manager

Chicago, USA

T. +1 312 377 6130

F. +1 312 377 6134

[email protected]

Berlin - Headquarters Mr. Oliver Seiler

Director

Mechanical & Electronic Technologies

T. +49 30 200 099 400

[email protected]

North America

Europe

Asia-Pacific Tokyo Office

Mr. Iwami Asakawa

Japan Representative

Tokyo, Japan

T. +81 3 5275 2072

F. +81 3 5275 2012

[email protected]

New York Office

Mr. Claus Habermeier

Director

New York, USA

T: +1 212 584 9715

F: +1 212 262 6449

[email protected]

Mr. Max Milbredt

Manager

Electronics & Microtechnology

T. +49 30 200 099 408

[email protected]

San Francisco Office

Ms. Angelika Geiger

Director

San Francisco, USA

T: +1 415 248 1246

F: +1 415 627 9169

[email protected]

Mr. Jonathan Schoo

Manager

Electronics & Microtechnology

T. +49 30 200 099 430

[email protected]

Mr. Jérôme Hull

Manager

Machinery & Equipment

T. +49 30 200 099 406

[email protected]

Mumbai Office

Ms. Asha-Maria Sharma

India Representative

Mumbai, India

T. +91 22 6665 2180

F. +91 22 6665 2179

[email protected]

Dr. Rainer Müller

Senior Manager

Applied Sciences & Technology Transfer

T. +49 30 200 099 410

[email protected]

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