Introduction: Defining Bosch in the Marketplace

Welcome to Bosch Packaging Technology`s press conference. In the pharma industry we provide complete solutions from processing to packaging. We also provide the expertise enabling our customers to assemble complete automated systems ideally suit their needs. The new technologies Bosch is introducing at Achema help our customers meet many of the challenges and trends in the pharmaceutical industry today. Our consistent investment and growth in strategic arenas is leading to better technology and service for our customers worldwide to meet the demands of these trends and, ultimately, succeed.

Following the successful integration of the Sigpack companies over the last two years, sales from the Packaging Technology Division grew to 927 million Euros. The growth is strongly driven by the business field ATMO, which delivers assembly systems and special machinery for other divisions of Bosch. In 2005 the sales in the core business of packaging accounted for 541 million Euros.

Bosch Packaging Technology delivers reliable solutions for various products and packaging styles in different industries. The major part of the business exists in the pharmaceutical industry. Despite of the decreased sales volume in 2005 the Pharma business, with a share of 44 % order income, is even gaining importance in our portfolio. Solutions for the food industry account for 30 % of the total sales. Bosch also provides full line processing and packaging solutions for the confectionery industry which account for 22 % of the sales. The remaining 4 % come from sales to cosmetics, chemicals and non-food product segments.

As a global player in our industry, we generated 87 % of our sales outside of Germany and 55 % of the business is done outside of Western Europe. Although the overall sales volume is lower than in 2004, the worldwide spread of our activities is stable. Just the share of sales in Germany was stronger in 2005 which was compensated in the worldwide mix.

Industry Trends: Global Markets / Changing Dynamics

In 2005 the total pharmaceutical market grew by 7% to 500 billion Euros. Emerging markets such as China, Russia, Turkey and Korea had double digit growth, contributing significantly to this large growth rate.

The large growth in the developing markets is based on the significant growth of the gross domestic product (GDP) growth which helps to finance improvements in the healthcare systems. Higher personal incomes also allow more people to purchase medicines. For the future, markets in China, India, and Brazil will provide strong growth opportunities for the industry based on the expanding pharmaceutical manufacturing capabilities and also based on the increased regulations towards product quality and security.

In terms of packaging, there is robust growth ahead for this sector. The global pharmaceutical and healthcare packaging market will grow with a compound annual growth rate (CAGR) of 6.2 % from around 16 billion Euros in 2005 to 21 billion Euros in 2009. With approximately 34 % of the share, North America is still the largest market, followed by Western Europe with 29 % and Asia with 24 %. Eastern Europe`s share is relatively low at 4.5 % but expected to increase above average to 5.3 % in 2009.

The pharmaceutical packaging technology market for new machines accounted for around 2.7 billion Euros in 2005 with Bosch having a share of approximately 9 %. The market is estimated to grow by 4.3 % until 2009.

Currently the pharmaceutical industry is facing major changes since the rate of drug discovery is expected to decrease significantly. Beside a decreasing rate of new drugs launched on the market, pharmaceutical companies expect R&D costs to increase significantly. The challenge for the future will therefore be to meet growth expectations while facing a declining product pipeline.

Another ongoing trend is the increasing heterogeneity in customer requirements which will lead to higher complexity in product handling. This will open up new opportunities for suppliers to this industry. The introduction of substituting generic products and with this increasing buying power of the end-user market will lead to increasing rivalry amongst established pharmaceutical producers.

Click Here to Access Complete Press Release