Operations and Business Environment - Fresenius Medical Care

Employees
At this point, Fresenius Medical Care expects to further
expand in most regions in the years to come. We expect
to employ more than 60,000 people (full-time equivalents)
by the end of 2007. This would be an increase of
approximately 5 % compared to the end of 2006. For
2008, we anticipate our workforce to grow by 4 % to
more than 62,000 employees. These growth rates would
be lower than in previous years and would lag behind
revenue growth.
We expect above-average growth in staff numbers in
the developing regions of Eastern Europe, Latin America
and Asia. The distribution of employees in the regions
should remain nearly unchanged, though. About two
thirds of our workforce is employed in North America.
We continue to view training of young people in Germany
as an important contribution to society. In the
years to come, the Fresenius Group intends to train
young people beyond its own demand.
Legal Structure and Organization
In 2006, Fresenius Medical Care completed its transformation
into a “Kommanditgesellschaft auf Aktien”
(KGaA). The Company is not planning any further
changes to its legal form in the foreseeable future.
Fresenius Medical Care’s activities are organized into
three operating segments: “North America”, “International”
and “Asia-Pacific”. For reporting purposes, we
aggregated the International and Asia-Pacific segments
into the segment “International” because of similar
economic conditions in the operating segments. The
similarity relates, among other things, to the products
sold, patient structures, methods of distributing products
and services, as well as the economic environment.
At present, we expect to retain this organizational
structure in 2007 and 2008.
Moreover, Fresenius Medical Care has a decentralized
organization to be able to react to market requirements
with the greatest possible flexibility. This principle
of “entrepreneur in the enterprise” with clearly
defined responsibilities has had a good track record for
many years and will be continued.
Procurement and Logistics
In the current business year, we will continue to intensify
cooperation between the different procurement
departments within Fresenius Medical Care and at the
same time cooperate even more closely with external
partners. Our aim is to further enhance our position in
price negotiations with suppliers.
In addition, we intend to optimize purchasing of chemicals
and, starting in 2007, to procure products directly
from manufacturers pooled company-wide.
We do not expect the price for energy and petroleumbased
products to ease significantly in 2007 and 2008,
and as a result they will remain the focus of our
procurement activities. The main reason for the price
development will probably continue to be the high
demand for crude oil and natural gas, amplified by the
great demand in growth regions such as China.
Standardizing products, packaging and packaging
materials is very cost-efficient. Uniform products in uniform
packaging simplify logistics, for example, as transports
can be coordinated better and loading capacities
can be used more efficiently. In addition, standardized
packaging materials are less expensive.
Quality and Environmental Management
We are planning to introduce the Integrated Management
System in additional dialysis clinics. In 2007, more
than 60 dialysis clinics in Europe should be certified
according to ISO 14001:2004 and more than 50 according
to ISO 9001:2000. To achieve this goal, we will train
further employees to conduct internal audits in line with
IMS requirements. Most of these audits will be conducted
in Eastern Europe.
107
Fresenius Medical Care 2006