Use the opportunities offered by the world market and produce where markets are growing this is the strategy of German fittings manufacturer Grohe. After a record construction time of only six months, the company has inaugurated its new production building in Klaeng, Thailand. Ten million euros (five hundred million baths) have been invested in the expansion. This means that the company has achieved its target to double production capacities in Thailand and invest in new technologies in next to no time. David J. Haines, Chairman of the Management Board: “In recent years, Grohe has become the leading global brand for sanitary fittings and shower systems, not least thanks to our early internationalisation. We have a global market share of roughly ten percent, which makes us a strong player. We want to consolidate and expand this market position.” The investments in international production locations are not meant to replace the German centres of competence in the long term, though. Germany will remain the innovation and technology driver.
“We want to leverage advantages for production and manufacture our products “closer to markets” for the world market. The percentage of non-German production will be increased consistently, as we see the best growth opportunities abroad. This is where we generate 80% of our sales above all in Asia, the USA and the Middle East,” said David J. Haines.
The Klaeng facility focuses on the full-scale manufacture of brass fittings; the required new equipment has already been installed, including a central melting house and a low-pressure casting machine. 650 people today work at the plant, and this number is set to rise to over 900 in 2006. Grohe’s demand for new qualified employees has almost exclusively been satisfied with local applicants. The company has hired production staff, industrial engineers and engineers for process development, casting technology, metallurgy, tool-making and lean manufacturing. As a result of the construction work in recent months, the site has grown from 42,000 to 84,000 square metres, with a 60 percent increase in production space to 10,000 square metres. In addition to a new 800 square metre staff amenities building, Grohe also invested in new infrastructure such as roads, parking space and a water treatment pond.
Grohe’s move to Asia is based on a long-term international production strategy, as the company chose Thailand as a major production location already ten years ago with a view to developing new markets. There were numerous arguments in favour of Thailand: It is a crisis-resistant country with great political stability, a well developed infrastructure and highly motivated and skilled people.
Like all other Grohe locations, the Klaeng plant operates according to the lean manufacturing principle. Detlef Spigiel, Director of Technology: “It has always been our philosophy to match our manufacturing footprint to our market activities. Asia is one of Grohe’s growth markets. Only by offering the same brand quality that we produce in Germany and elsewhere will we be able to develop our business successfully in this region. And that is exactly what we are doing. Today, Grohe’s foreign manufactured products achieve the same quality standard and the same low error rates as the company’s German manufactured products.“
All branches in Grohe’s global production network operate with the same high precision, which is ensured, for instance, by certification to ISO 9000 and ISO 14000, which also applies to the Klaeng facility. Consistent global standards
guarantee a forward-looking production system and manufacture to the “Grohe BEST“ principles. Detlef Spigiel: “Whether it’s our working conditions, our training and further education system, environmental management or quality assurance, all locations in our global production network operate with the same high precision. You will see only minor differences between local production and our production in Germany. No matter where in the world Grohe products are manufactured, their quality is always identical.“
To exploit existing potential and expand Grohe’s position in the world market in the long term, the company plans to make worldwide investments of EUR 200 million (10,000 million baths) by the year 2008. Specifically, the company will boost the professionalism of its sales organisation and will raise its investments in research and development by 15%. Also Paul Flowers has been appointed Chief Designer to steer Grohe’s product development efforts to a truly world-class level.
“We owe our international success to high quality, functionality and continuity, innovative technology and modern design. There can be no doubt that we will stick to these core values of our brand also in future. We will start the new year with a new product offensive and a sharper brand profile. We are the water experts – in every respect. We will prove that nobody delivers water better or more economically than we do”, Detlef Spigiel said on the occasion of the inauguration of the new facility in Thailand.
About GROHE Water Technology AG & Co. KG
Holding roughly 10% of the world market, Grohe Water Technology AG & Co. KG is the biggest European and the world’s leading manufacturer of sanitary fittings. As a global brand for sanitary products and systems, Grohe is setting standards in quality, function and design. Headquartered in Hemer, the company currently employs some 5,800 people worldwide, including 4,300 in Germany. In 2004, Grohe’s kitchen and bathroom fittings and showers, automatic fittings for the commercial and contract sectors, and installation and flushing systems generated sales of EUR 911 million (45,550 million baths). Grohe has six production plants, of which three are located abroad, namely in Portugal, Thailand and Canada. The company generates 80% of its sales outside Germany.
GROHE is the largest fittings manufacturer in Europe.
GROHE is the largest exporter of bathroom fittings worldwide.