GEA Group AG has recently decided on strategic guidelines and significant investments to further optimise its production network.
In this context, production at the Bodenheim site near Mainz will be discontinued by the end of 2024. The plant in Koszalin, Poland, will be expanded into a Center of Competence for pump production and comprehensive machining. GEA will invest around €30 million (US$35.3 million) in this expansion. Investments and a further consolidation of production and process activities are planned at other locations too.
The aim is to further strengthen GEA’s global production network in order to increase productivity and reduce its cost base.
The strategic guidelines and production optimisation form part of a series of measures the Group has implemented since 18 months back and these include a new organisational structure, restructuring measures, and the new composition of the Executive Board.
As part of the production strategy, production is supposed to become more international to increase customer proximity and leverage cost advantages. Additionally, it planned to concentrate products and processes with synergy potential at certain locations and to increase capacity utilisation. The aim is also to expand standardised production based on modular systems and to optimise the depth of value creation, partly through the reintegration of tasks that had previously been outsourced. The expansion of the Polish site in Koszalin is the first major investment within this production strategy.
Since the implementation of the new strategic guidelines in 2019, GEA has already relocated around 40,000 production hours from France to Tianjin in China. The transfer of a further 120,000 production hours within China by consolidating the Shanghai plant with Suzhou will be completed by the end of 2020. The current productivity initiative and associated investments in digitalisation and automation are expected to increase productivity and reduce overall costs.
Stefan Klebert, CEO of GEA Group AG said, “Optimising our global production footprint is an important step to increase our profitability in the long term. We are building on previously implemented improvement measures that already had a positive effect on our financials in previous quarters. Going forward, we will focus on certain standardised products and processes at individual sites. At the same time, we stay true to our basic principle of producing “local for local” to best meet customer-specific requirements. This partial centralisation allows us to better balance our production concept between customer proximity, efficiency, and proven site-specific expertise.”
GEA is one of the world’s largest systems suppliers with the food and beverage industry being one of its core business category. The group generated revenue of up to €4.9 billion (US$5.77 billion) in 2019.
GEA’s plants, processes and components contribute significantly to the reduction of CO2 emissions, plastic use as well as food waste in production globally.
