Jungheinrich chairman Dr Cletus von Pichler says the company must extend sales efforts to new countries if it wants to participate in global economic growth.
Dr von Pichler, speaking before Jungheinrich's annual general meeting on June 2, said the company had positioned itself to take advantage of a recovering economic environment.
"A company that wishes to build a powerful sales organisation outside Europe is dependent on having a complete product range," he said. "In 2003, we therefore expanded the counterbalanced trucks division further and ploughed high capital expenditure into R&D."
The world materials handling market developed better than expected in 2003, with Asia and North America achieving above-average growth, he said. In the USA and Asia, counterbalanced trucks - primarily IC engine powered trucks - dominated. Dr von Pilcher said Jungheinrich would introduce a new series of diesel counterbalanced trucks this year, and a new battery-powered counterbalance truck would follow.
In 2003, the foreign ratio in group sales increased to 72.3%, with exports mainly to Europe. "From now on, we plan to work the markets of Asia and America more intensely," Dr von Pichler said. Capital expenditure rose to EUR61 million (USD74.7 million), and R&D grew to EUR33 million (USD40.4 million) or 5.7% of net sales in 2003. That resulted in the launch of new products in all sectors, from hand pallet trucks to large warehouse system trucks.
In February 2003 Jungheinrich decided to close its Leighton Buzzard (UK) plant by the end of June this year. The company now concentrates on Moosburg, where two product lines started at the beginning of the year and a third will come on line on July 1.
In December the company also decided to discontinue its subsidiary MIC SA. Production of hand pallet trucks at the French company's Argentan plant ended on May 14. Production of battery-powered pedestrian trucks was transferred from Argentan to the company's Norderstedt plant.
Jungheinrich also concluded a delivery contract for hand pallet trucks with Chinese company Ningbo Ruyi. It will acquire a 25% stake in the company before the end of this year.
Dr von Pichler warned that productivity at Norderstedt, which produces pedestrian low-lift and high-lift trucks, would be reviewed and said it may not be possible to maintain the current workforce. He said there would be a reduction of Jungheinrich's global 9200-strong workforce to less than 9,000 employees this year.
In comparison to 2002, incoming orders and net sales were barely maintained in 2003. Net sales did not increase, but operating income grew 5.3%. Market share was maintained in 2003 but Jungheinrich is still struggling to return to the share it held in 2001. Group net income was halved to EUR21.1 million (USD25.8 million).
Dr von Pichler said Jungheinrich had the necessary "bite" to maintain its position in the market, but warned that "improvement in the productivity of our plants is absolutely indispensable". This year began moderately but, since March, market volume - mainly in counterbalanced trucks - grew significantly in non-European markets. Compared to the first quarter of 2003, the growth rate of incoming orders has doubled from 2% to 4% and a decline in net sales of minus 4% was cut to minus 1%.
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