Operations and Business Environment - Fresenius Medical Care

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02. 3 Our Fiscal year Major Production Sites Walnut Creek U.S. Ogden U.S. St. Wendel Germany Schweinfurt Germany Inukai Japan 84 Guadalajara Mexico Reynosa Mexico L’Arbresle France Cremona Italy Buzen Japan quence, we took the first steps to expand our production capacities for FX-class dialyzers in Germany and Japan. We intend to increase the production capacity at the St. Wendel facility alone by around ten million dialyzers a year by 2008. In addition to expanding production capacity, we continually strive to improve production processes. In St. Wendel, for instance, we now use a fully automated, computerized camera system for visual control. It recognizes possible production flaws very quickly and effectively and thus enhances the quality of the dialyzers. We also intend to significantly expand our dialyzer production capacities in the U.S. in the next two years, adding two production lines in our factory in Ogden, Utah. The annual production capacity there is expected to increase from 27 to 34 million dialyzers. The market share of our dialysis machines was even higher than that of our dialyzers in 2006. More than 50 % of all dialysis machines produced worldwide were made by Fresenius Medical Care. We produce three times more of these complex machines than the second-largest manufacturer. On account of the strong demand for our dialysis machines, we have increased production of components for these machines for the U.S. market by more than 20 %. We have also boosted our output outside of North America. In 2006, production of the dialysis machine series 4008 and 5008 climbed by more than 20 % in these regions as well. After introducing the “Lean Six Sigma” management system in the U.S. in 2005, we launched it in Schweinfurt in 2006. Lean Six Sigma is used to analyze and coordinate all production processes. With this system, we are pursuing two goals simultaneously: achieving even better production results while shortening manufacturing times. Fresenius Medical Care 2006
Quality and Environmental Management To ensure constantly high quality standards, we developed the Integrated Management System (IMS). It works with the legal and normative guidelines for our products and services and focuses on established operational workflows. The IMS fulfills the ISO 9001:2000 requirements for quality control systems in combination with the ISO norm 14001:2004 for environmental control systems. At the same time, it conforms to the requirements for medical devices of ISO norm 13485:2003. The IMS has already been implemented in all of our European production sites and will now gradually be introduced in our dialysis clinics as well. In parallel, we are constantly refining the system. In 2006, we introduced the quality control norm ISO 9001:2000 in about 50 additional European dialysis clinics, including facilities in Slovakia. As a result, approximately 65 % of our clinics in Europe are certified, compared to about 55 % in the previous year. Certification according to environmental control norm 14001:2004 has also made headway, and now more than 50 dialysis clinics work in accordance with this norm, including, since 2006, dialysis centers in Poland, Slovenia, Turkey and Italy. As planned, we trained a total of 50 employees, so-called corporate auditors, to perform internal audits based on the IMS. Another focus of our work is to prepare drugs for approval and submit the necessary applications. The approval of drugs is subject to national and international regulations, and quality management is in charge of controlling their internal realization. The aim is to speed up approval of products to shorten the time between development, clinical testing and marketing of products. To meet this goal, the Mutual Recognition Procedure is particularly important. Valid throughout the EU, this directive allows for the accelerated approval of medical products – if they have already been approved by another EU member state. In 2006, a total of 28 peritoneal dialysis products were approved, including products for PD solutions from the balance series (see the glossary beginning on page 114 ), as well as for dialysis drugs in Europe and Asia. As previously mentioned in the “Strategy” section on page 50 , we intend to become more involved in the area of dialysis drugs in the future. Preparing these drugs for approval will be a focus of our quality management. We took the first steps in 2006, adapting, for example, internal structures and processes accordingly. Apart from introducing the environmental control system in our clinics, our work focused on the implementation of the RoHS and WEEE EU guidelines. RoHS stands for “Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment”. Since mid 2006, this guideline has limited the usage of certain hazardous substances in electrical and electronic devices and completely forbids the usage of lead, cadmium and quicksilver in these devices. WEEE stands for “Waste of Electrical and Electronic Equipment”. The guideline regulates collection, disposal and treatment of electronic waste. In 2006, Fresenius Medical Care updated the labeling of products in accordance with WEEE at its Schweinfurt factory, among others. Active environmental protection at our production sites means continuous improvement of our processes, in order to be more environmentally compatible and, usually, more cost-efficient. For example, by using heat recovery systems at our St. Wendel plant we considerably reduced the amount of steam used and thus cut the amount of natural gas we needed as an energy source by 4 %. We were able to reduce the energy consumption at our factory in Cremona, Italy, by 15 %, simply through optimizing the use of lighting systems and air conditioning. In addition, logistics costs for truck transports were cut by 10 % thanks to improved coordination of transport routes between individual suppliers. Waste separation has considerably reduced the amount of residual trash at Fresenius Medical Care’s dialysis clinics in North America. Waste is now separated in more than 900 clinics. As a result, we recycled 3,500 tons of cardboard and paper packaging in 2006. Saving water is also an important contribution to resource conservation. In 2006, we installed more than 80 water preparation systems to produce ultrapure 85 Fresenius Medical Care 2006
Page 1 and 2: 02. 1-6 With more than 56,000 emplo
Page 3 and 4: Our Fiscal year 02. 1 02. 1 Operati
Page 5 and 6: Path 2: Acquisitions. We intend to
Page 7 and 8: In addition, our development depart
Page 9 and 10: on the basis of growing clinical ex
Page 11 and 12: Asia While Japan’s gross domestic
Page 13 and 14: dialysis and about 165,000 receive
Page 15 and 16: As in previous years, many healthca
Page 17 and 18: Dialysis machines constitute anothe
Page 19 and 20: Comparison of the Actual Business R
Page 21 and 22: The Management’s General Assessme
Page 23 and 24: In terms of dialysis products, we w
Page 25 and 26: Europe, including the Middle East a
Page 27 and 28: egarding stock options and the incr
Page 29 and 30: Financing Detailed information on f
Page 31 and 32: of existing production facilities i
Page 33 and 34: The Group has no significant accrua
Page 35 and 36: is among our most important goals.
Page 37: departments enter into outline cont
Page 41 and 42: Clinical Databases Clinical databas
Page 43 and 44: In addition, we received regulatory
Page 45 and 46: combines RCG’s industry-leading s
Page 47 and 48: - In April 2006, new guidelines wer
Page 49 and 50: titative appraisals of the likeliho
Page 51 and 52: Risks in the Healthcare Industry Ri
Page 53 and 54: possibility of default. Please see
Page 55 and 56: to page 95 of the Consolidated Fina
Page 57 and 58: 02. 6 Outlook Business Policy Frese
Page 59 and 60: dialysis will remain the treatment
Page 61 and 62: Employees At this point, Fresenius

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