MGemuendspeech.doc17.04.0218March20021SuccessfulCustomManufacturingInaHighlyCompetitiveEnvironmentSOCMA,SyntheticOrganicChemicalManufacturersAssociationLuncheonMeetinginNewYorkonMarch21,2002MarkusGemünd,CEO,LonzaGroupLtd.MGemuendspeech.doc17.04.0218March20022LadiesandGentlemen,Iwouldliketothankyouforyourinvitationtospeaktoyoutoday.Ifeelhonoredandprivilegedtobeyourguestatthistraditionalevent.Slide1SuccessfulCustomManufacturingInaHighlyCompetitiveEnvironmentAsaleadingcustommanufacturerweareconstantlyconfrontedwithvaluemigrationandwehavetoadapttothiseverchangingbusinessenvironment.Twopillarsareattheheartofoursuccessintoday’shighlycompetitiveenvironment:ourpeopleandabusinessmodelbuildingonsoundstrategicdecisionsanticipatingfuturecustomerneeds.Alonglastingtrackrecordandtrustandconfidenceofthecustomerbasecombinedwiththecapabilityofourworkforceto“driveforperformance”providetheplatformforgrowth.Butletusnotfoolourselves:thisisatoughbusinesstobein.Thehighvolatility,orlumpiness,intermsofdemand,theextensiveknow-howandregulatoryskillsrequired,e.g.inthemammaliancellculturetechnology,thehighassetintensityandthewarfortalent,againparticularlyinthebiotechareawillhavetheeffectthattherewillonlybeafewcompanieslikeLonzaabletosuccessfullypositionthemselvesinthecustommanufacturingarenaofthefuture.Weallaskedourselvesinthepastfewyears:acquisitionsand/orinternalgrowth?WechosethewayofinternalgrowthbasedonabroadsetoftechnologiesanddrivenbyaperformanceethicwhichisrootedthroughouttheGroup.Sizeisnoteverything,deliveringvalueandresultsis.Asprovenbyourfinancialperformanceofthelastfouryears,alsosmallandmedium-sizedcompaniesareinapositiontoachieveaboveaverageperformanceprovidedthestrategyiswelldefinedandproperlyimplemented.Slide2+3StrategyWhatvision,strategyandculturemeanstouscanbestbeexplainedbygivingyouapracticalexample:MGemuendspeech.doc17.04.0218March20023DuringthedemergerprocessfromtheformerAlusuisse-LonzaGrouptheLonzaManagementclearlyrecognizedtheneedtocarryoutanextensivereviewofthestrategicoptionsavailable.Slide4Thereweretwobasicchoices:•ThefirstforLonzatofocusonthelifesciencessector,withconsequentstreamliningoftheportfoliotoconcentrateonthedevelopment,bothorganicandacquisitive,ofthetoolboxnecessarytoaugmentanddefendthe(leadership)positionthatourGrouphadalreadyachievedincustommanufacturingandotheractivitiesinthelifesciencefield.•Thesecondoptionwastoaccepttheembeddeddiversityofourchemicalsbusinesses,andlookforwaystoaggregatemassandthusgrowalongthelinesofthetraditionalspecialtychemicalsmodel.Afterthoroughreviewwecametotheconclusionthatthemostvalue-accretivealternativerequiredthefocusingofLonzaGrouponthelifesciencessector,byfullyutilizingandfurtherdevelopingitsbiotechnologyandchemicalscapabilities.Withinthescopeofthestrategicreorientation,businessesnotalignedwiththefocusonlifesciencesweretargetfordivestiture.InlinewiththereformulationoftheGroup,sizableinvestmentswereandwillbemadeinthreestrategicprojectsintheareasofmicrobialandmammaliancellfermentationandintraditionalorganicchemistry.Earlyonwerecognizedthatfocuson“whatwearegoodat”isabsolutelycrucial.Wearetodaythemostfocussedcustommanufacturingcompanyofferingawiderangeoftechnologiesandservicestothelife-sciencesindustry.Ourfinancialkeyfiguresandourstrongfocusmakeitdifficulttodefineourpeersintheindustry.MGemuendspeech.doc17.04.0218March20024Vision...
