Healthy Growth

Emerging Markets

New Potential. Greater prosperity in the emerging markets opens up new opportunities.

Markets are dynamic places. Sometimes the pace of change is moderate, at other times it’s breathtaking. A number of countries around the globe such as Brazil, Russia, India and China have been rapidly evolving into modern industrial nations for some years now. The economic growth that has occurred in these regions is providing more and more people with access to medical care. At the same time, population figures are rising in many countries. Both developments are demand drivers that offer us excellent revenue growth opportunities. Thanks to our strong local presence in the emerging markets, we are already in a position to take advantage of these opportunities today – and have more to come in the future.

Rapid Growth
As an internationally operating company we are strengthening our presence in growth markets.

Emerging market regions such as Emerging market regions such as South America and Asia are experiencing high growth rates. This is reflected in the pharma market’s rapid expansion. Greater prosperity is significantly driving demand for healthcare services.

Development of GDP

in % 2011 2012 e
e = expected
China +9.2 +8.5
India +8.5 +7.5
Brazil +2.8 +3.5
Russia +4.1 +3.5
USA +1.8 +2.2
Europe +1.6 +0.7

The BRIC countries, i.e. the emerging markets of Brazil, Russia, India and China, are all characterized by high growth rates plus record foreign trade figures, investments and increasing employment rates. All these developments are attracting the attention of economic policymakers to the BRIC countries. The future outlook is pretty impressive:

Expenditure on pharmaceutical products in the emerging markets is expected to almost double by 2015. By this time, they will then have a larger market volume than the top eight established industrial nations together (USA , Canada, Japan and the five leading European markets).

A total of three billion people live in the BRIC countries, which is approximately 40 % of the world population. With a greater number of people having access to a healthcare system, the potential number of patients increases and so does the demand for medical services and pharmaceuticals. China has the fastest growing pharmaceutical sector and market. However, there are also major growth forces at work in Brazil and a new economic age has dawned in India. In fact, India has one of the most rapidly expanding economies in the world.

High growth rates:
Expanding our business in emerging markets is a core element of our growth strategy.

Local presence is the key to success

Our business strategy for the emerging markets is to closely track and profit from growth market trends. We are expecting demand for pharmaceuticals to increase. One area in which expenditure will increase significantly over the next five years is generic drugs. Therefore the focus will be on simple and inexpensive, but high quality primary packaging. As a supplier of high quality, primary packaging products made of glass and plastic, we are present where our customers are. This local presence is absolutely essential if we want to fully exploit the market potential and achieve profitable growth in these markets. We already have a strong position at many places around the globe – from Mumbai and Moscow to Peking and Sao Paolo. Further investments, into organic growth or by means of acquisition of companies, are part of our strategy.

Rapid increase of sales: Demand for Pharma & Healthcare will even grow further in the emerging markets.

A far stronger market position in Brazil

Our acquisition of the Brazilian company Vedat has enabled us to strengthen our position in the South American market for plastic primary packaging products. Vedat is the leading manufacturer of plastic closures. In conjunction with our existing plastic packaging production plants, we are now able to operate as a full-service partner to our South American customers. We currently have a total of four plastic packaging production plants in Brazil and Argentina. We have also been operating a medical plastic system plant in the metro area of Sao Paolo since 2010, where we predominantly manufacture components for the insulin pen systems used by diabetics. Close to our customers, we produce exactly the solution which is needed for the safe and precise administration of insulin.

Seven plants in China

In China, the country with the highest population in the world, we have production operations at seven sites. We are present with the manufacturing of glass primary packaging products, medical plastic systems, cosmetics packaging and laboratory glassware.

Targeting the growth market of India

We opened a sales office in Mumbai in autumn 2010 with the objective of driving pharmaceutical primary packaging business in this growth market. In addition to our local sales operations, we have also invested in offering a broader range of local advisory and technical services to customers.

Growing numbers of patients: Gerresheimer is serving the rise in demand for safe primary packaging products for medications in emerging markets.

North America

FULL OF LIFE. People are living for longer but feeling younger. In North America, and elsewhere, the 50+ generation is a key, actively aging target group.

The global healthcare sector will continue to grow in the upcoming years. The USA in particular will remain a highly developed and lucrative market. This is due to a great extent to factors such as developments in medical technology. The increasing median age of the population also makes effective healthcare infrastructures absolutely essential. Besides the overall demographic development, this market is in a process of political change that promises a positive future for all players in the healthcare sector.

Growing Demand
We are consolidating our position in the world’s largest pharma market – North America.

The United States is traditionally one of the most important pharma markets in the world as a result of its numerous global pharmaceutical corporations and high economic output. Despite undergoing structural changes, this market’s potential is still high.

US population by age group

in % 2010 2020/ 2025
15-64 age group 66.8 63.3
65+ age group 12.9 16.0

Average population age in 2010

China 34.5 years
USA 36.9 years
Canada 39.9 years
Germany 44.3 years

The economic crisis has hit the USA hard over recent years. However, the pace of economic activity has been picking up again since 2010. Economic growth, industrial production and manufacturing capacity utilization are developing positively and gross domestic product increased by 1.8 % in 2011. Contrary to the situation in many European countries, the US population is not shrinking, but is growing due to immigration. Parallel to this development, the number of elderly citizens is rising. This places greater challenges on the healthcare system.

The US healthcare system, anyway, faces some drastic changes. In 2010, after intensive political debates and decision processes, President Barack Obama implemented a reform providing citizens with easier access to healthcare services with the objective of a long term reduction in the number of people without health insurance. The more people are insured, the greater the number of medical services and pharmaceutical products that will be required.

An attractive market with good prospects:
North America is where we can effectively build on our leading position.

Comprehensive portfolio of products for diverse therapeutic applications

Lifestyles in western industrial nations and in the USA are contributing to an increase in certain lifestyle diseases such as obesity and diabetes. The number of asthma sufferers will also continue to rise. The field of oncology and targeted therapies for other serious diseases are gaining in significance, though they are also associated with special challenges. Both medication and diagnostics will play an important role in pre-therapy. For the development of these medical devices, our Business Unit Medical Plastic Systems has competent resources.

In the growth market for anti-diabetes and asthma medications, there is demand for reliable drug dosage concepts that offer high convenience and good design. We have a comprehensive portfolio of drug delivery systems such as syringes, pens and inhalers for this market. At the same time, our innovative primary packaging products in multishell plastic guarantee the safe and reliable storage of expensive, toxic or aggressive medications. We have established a leading position in the US market for pharmaceutical glass packaging products and we also operate in other business sectors here. We especially aim to achieve growth in the plastic packaging sector.

Safety, convenience and design: Gerresheimer satisfies the most sophisticated product requirements.

Market leader in glass packaging products

We are present in the North-American market with our Tubular Glass and Moulded Glass Divisions for many years now with a total of six production plants in the USA and Mexico.

A Technology Center for the US market

We have substantially extended our production portfolio at the Peachtree City plant (near Atlanta/ Georgia) since 2010. Now that additional production facilities and clean room areas have been added, plus a medical plastic system development center, we can handle entire projects, from design development and industrialization to mass production, at one single location.

Strong market position with laboratory glassware

In North America, Gerresheimer also has a joint venture with Thermo Fisher which gives it a strong position in the laboratory glassware market. Together with Thermo Fisher, we have three affiliated production facilities in the USA and one in Mexico, besides further plants in China and Germany, securing our leading position in the North American market.

Recognizing market development and tapping full potential: We’ve already adapted our product portfolio to the changing population structure in the USA.

Europe

Greater Freedom. Chronic diseases are on the increase in Europe, as is the trend of self-medication. The main priority for many people is the desire to handle their own medication and to live their lives with as few restrictions as possible.

Independence despite being ill: Modern pharmaceutical products and processes provide patients with greater flexibility within their therapy. Even people who are not ill are increasingly assuming responsibility for their own health and investing in their personal well-being. This allows us to utilize our entire spectrum of development expertise and target the extension of our already comprehensive product range.

Reliable and Safe Products
We provide for a better quality of life.

Demographic change is also a key trend in Europe. It is altering and increasing the need for healthcare services, which are meanwhile subject to a continuous growth in demand.

The European health systems are coming under increasing cost pressure as a result of rising expenditure on healthcare. There are now far more elderly citizens who require nursing and care. Lifestyle diseases such as diabetes and allergies are still increasing in all age groups. Improved diagnostic procedures lead to an early discovery of diseases.

At the same time, there is another trend to be observed: People are paying much more attention to their personal health. Increased life expectancy, excellent medical care and material wealth have triggered a desire in many people to take maintaining their health and well-being into their own hands. Self-determined with a high level of independency. Even healthy people are investing more time, energy and money in their physical and mental health. Therefore, the healthcare market is moving away from simply treating patients and has gained a new and profitable segment geared to products and services that prevent disease or maintain health.

Growing with the trend:
We further invest in the development and production of drug delivery systems.

Systems that are simple to use

Some diseases such as asthma or diabetes are becoming increasingly widespread. Thanks to advanced research and development in this area, many asthma and diabetes patients are today able to administer their medications themselves. Obviously they need the right products to do this: high quality products that are easy for them to use. Therefore, we offer a wide range of specialized products. Our portfolio extends from simple packaging units such as glass vials or ampoules to complex drug delivery systems for reliable and precise dosage and delivery. We develop insulin pens for diabetics, inhalers for asthmatics, lancing devices and diagnostic instruments for leading pharma, diagnostic and medical technology enterprises. Throughout the development process, from the initial design sketches through to tool making, automation technology and production to finishing, packaging and just-in-time delivery, we work closely with our customer.

Unrestricted mobility: The range of our product applications is as diverse as the people using them.

Expansion of the Horsovsky Tyn and Pfreimd plants

The Horsovsky Tyn plant is one of our most modern production facilities for medical plastic systems and we are continuously expanding it since 2011. After doubling the production, the plant’s employee headcount will increase from 375 to 450. Around EUR 12m has been invested in the Horsovsky Tyn plant. We are also stepping up production operations in Pfreimd, where we are investing around EUR 25m and creating 130 new jobs. We are enlarging our Competence Center for pre-fillable syringes in Bünde (Germany) with a fourth production line at an investment of around EUR 20m.

Enhancing our development expertise

To further consolidate our growth in the Medical Plastic Systems segment, we are investing around EUR 3.5 m in the Wackersdorf plant where the

Technical Competence Center for medical plastic systems development is located. A total of around 250 highly specialized employees will be working on the development and optimization of our products in collaboration with our customers.

Innovation makes the difference

Providing a comprehensive range of services from market analysis to patent management to meet the needs of our customers in the pharma, diagnostics and medical technology industries and involve them as early as possible in the product development process. Our Medical Plastic Systems innovation team takes diverse factors into account, such as the needs and requirements of users, functional, technical and production-related requirements and, it goes without saying, our desire to create a winning design.

Simplicity of use is the key to reliable self-medication.

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