Annual Report 2011 (5.07 MB, PDF-File) - Oerlikon

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New Delhi: Domestic demand in India is expanding rapidly, providing huge growth potential for Oerlikon.
opment. Another reason for the site’s popularity is the instant
access to the local market relationships developed over a
number of years by Oerlikon Barmag and Oerlikon Schlafhorst.
This allows other Segments to tap the world’s second
largest economy much faster than if they had entered the
market on their own.
Systematic focus on the professional growth of the company’s
Chinese workforce is another success factor. Oerlikon Textile,
for example, is now conducting its third trainee program for
college graduates at the Suzhou location. These intensive
courses prepare young engineers for future jobs in the Group
and are one of the reasons Oerlikon has a remarkably low turnover
rate.
Management transferred to Asia,
R&D activity expanded
That Oerlikon considers the Chinese market to be of critical
importance is demonstrated by the decision to place the headquarters
and top management of Oerlikon Textile in Shanghai.
Several of the Segment’s activities will be managed from China.
By the end of this year, 40 % of Textile senior management will
be based at Oerlikon’s new offices in Shanghai.
Government focus on intellectual property laws has facilitated further
expansion of R&D activities in China. Oerlikon R&D capability
will be expanded to accelerate the regional adaptation of products
and solutions.
Not long ago, global companies considered low wages the
primary draw of emerging countries. This has changed.
Demand for high-quality equipment and processes continues
to rise in China, a trend that creates exceptional opportunities
for Oerlikon as a technology leader. Sales into China’s
domestic market have grown in proportion to the economy
and an increasingly large proportion of textile production is
being consumed locally rather than being exported. As part
of this evolution, Oerlikon has transformed itself from an
175
exporter to a local company with regional roots in China that
offers products and solutions targeted at domestic
customers.
India: South Asia’s largest growth market
In 2011, Oerlikon also expanded its strong presence in India.
There are many opportunities for Oerlikon to further leverage
and expand its businesses in this large market. India’s economy
is expanding rapidly despite the current slowdown in
global demand, albeit at a pace less than was forecasted
prior to the emergence of current global economic uncertainties.
The Indian economy is expected to grow at an accelerated
pace – over six times the rate of OECD economies – over
the long-term.
The major driver behind this impressive growth is the country’s
large and rapidly expanding domestic demand, which is the
focus of Oerlikon’s Drive Systems, Textile, and Coating segment
business in India.
Oerlikon continues to invest and expand in this important emerging
market. Sales into India over the past three years were in the
range of up to 10 % of total Group sales. The steady increases
were led by the Textile, Drive Systems, and Coating segments.
Oerlikon is developing a market penetration strategy for India
focused on capturing domestic market share and further leveraging
favorable labor costs. To further reduce costs and drive
efficiency in its Indian operations, Oerlikon is studying the feasibility
of a shared service concept similar to that which has been
so successfully implemented in China.
Oerlikon Drive Systems has made significant investment to expand
its Indian capacity in recent years and will continue to do so
in 2012 and beyond. The Segment is strongly focused on developing
innovative, tailored products to further boost domestic
sales and penetrate new domestic markets. The more volume
Drive Systems produces in India, the lower the product cost and