Merck 2014 Annual Report Download - page 20

15MAGAZINE → Markets in motion
Not long ago, there was still a clear world
order, one that was founded above all
on differences – political, ideological and
economic. Yet since the fall of the Iron
Curtain, these differences have been in-
creasingly disappearing, eliminated by the
march of globalization. New free trade
agreements have resulted in enormous
economic areas – the markets are in motion.
The once profound differences between
developing, emerging and industrialized
countries are crumbling, primarily due to a
growing level of prosperity. According to
estimates, the middle class will represent
around 60 % of the world’s population by
the year 2030, with the Asia-Pacific region
accounting for two-thirds of that figure.
This “emerging middle class” is still a long
way off from attaining the income level of
central Europe. Yet in the past several
decades, many millions of people have
risen out of poverty in emerging markets
such as China, India and Brazil. Urbani-
zation is the key to this economic growth.
People from rural areas are finding jobs
in the megacities, where they are earning
rising incomes and spending heavily on
everything from their first flat-screen TV
to their first car. Multinational corporate
groups, which are increasingly building
production facilities in Asia, are driving
this dynamic development. More and more,
the expanding middle class is leading to a
profound sociocultural transformation, in-
cluding a higher level of education, greater
political interest and growing health aware-
ness. Optimists view this transformation as
a long-term upward spiral of prosperity.
A WELL-HONED STRATEGY
The new world economic order is signifi-
cantly impacting the strategic direction
of global players such as Merck KGaA,
Darmstadt, Germany. It is giving rise not
only to incredible opportunities, but to
risks as well. After all, the competition is
not slumbering; in many sectors, new com-
petitors are springing up everywhere. Now
more than ever, it is therefore necessary for
companies to be in the right place at the
right time, with the right products. And
to equip themselves for the future. Success
tomorrow will only come to those who
invest in innovative technologies today,
make meaningful acquisitions, forge stra-
tegic alliances and expand local capacities;
to those who optimize their processes as
well as attract and retain a qualified work-
force. Merck KGaA, Darmstadt, Germany,
recognized the signs of the times early on
and is acting accordingly. The company
does not view emerging markets merely
as sales markets with enormous potential,
but also as key technology and production
hubs. This is why the presence in these
markets, has been significantly expanded,
whether that means OTC products for con-
sumer health, liquid crystals for consumer
electronics, laboratory products for the life
science sector, or medical care. In addition
to this, the company is creating more effi-
cient structures and processes through its
“Fit for 2018” transformation and growth
program. “We have significantly increased
our efficiency in the last few years and will
continue on this successful course. We are
already well-positioned in global growth
markets. We are making targeted invest-
ments in our businesses in order to further
expand our
strong position in Healthcare,
Life Sciences and Performance Materials,”
says Karl-Ludwig
Kley, Chairman of the
Executive Board.
HEALTH AS A KEY FACTOR
Growth is being driven by the need for
effective medicines, which is predicted to
rise f
urther. With the increase in prosperity,
the
birth rate is dropping, families are
being started later in life, and average life
expectancy is on the rise (see page 11). The
prevalence of diseases of civilization such
as diabetes and cardiovascular disorders
is predicted to increase even further. And
Merck KGaA, Darmstadt, Germany, offers
health solutions to address these issues.
“Emerging markets have accounted for al-
most two-thirds of the Group's Biopharma-
ceuticals business’ organic growth over the
last several years,” says Meeta Gulyani,
Executive Vice President, Head of Strategy
& Global Franchises at the Biopharma-
ceuticals business. “We are uniquely po-
sitioned to further our great potential in
emerging markets by driving growth of our
specialty care portfolio,” she explains.
“ ON THE TECHNOLOGY
FRONT, WE ARE SEEING
INCREASING VOLUMES
OF BIO
LOGIC DRUG PRO-
DUCTION.”
DANIEL STAMM →
HEAD OF GLOBAL PHARMA PROCESSING
AT THE LIFE SCIENCE BUSINESS