Fresenius Kabi

In 2009, Fresenius Kabi identified and partially realized attractive cost-cutting potentials. The focus of the procurement activities at Fresenius Kabi was on the “Global Sourcing Initiative” project. The project covered all production locations. Several teams were set up at each location to analyze the input materials used, energy consumption, and purchased services. The aim is to identify further potential for optimizing procurement, and for substituting input materials or harmonizing them Group-wide. The project was very successful; the potentials identified will be realized over the long term.

In 2009, the global economic situation strongly affected Fresenius Kabi’s purchase prices. After the prices of almost all the relevant raw materials reached all-time highs in mid- 2008, most of them then fell to their lows for the year. The prices of individual raw materials were still at a very low level at the beginning of 2009. In the later course of the year their prices picked up again. All in all, raw material prices in 2009 were below their corresponding average 2008 levels.

The prices of plastic granulate (for primary packaging and medical devices), foil (for primary and secondary packaging), and cardboard boxes and bag materials (for medical devices) were adjusted at regular intervals to the development of the underlying commodity prices. This also applied to glass bottles whose manufacturing processes are very energy-intensive. Their prices fell owing to the lower prices for heating oil and gas. We fixed the prices of products derived from corn by contract in 2009; under our framework agreements these prices will be reduced in 2010 into line with the fallen corn and energy costs. As had been expected, the level of supply on the world market for the processed milk products relevant for Fresenius Kabi was very high until the middle of 2009. We were therefore able to negotiate favorable purchase prices. All in all, the development of raw material prices had a positive effect on our cost of materials in 2009: we reduced our costs compared to 2008.

As expected, the cost of electricity and natural gas rose in 2009. As a result, Fresenius Kabi conducted consumption analyses at several production locations aiming to reduce energy consumption or to identify cost-cutting potential.

Fresenius Kabi has made a number of acquisitions in the area of IV drugs over the past years in order to extend its coverage of the supply chain. On this basis, Fresenius Kabi conducted a large number of make-or-buy projects in 2009. This analysis of numerous active substances and finished products indicates whether it would be best to manufacture them in-house at one of its own production locations or whether they should continue to be purchased in the market. Fresenius Kabi has already realized initial results and will be continuing these activities in the coming years.

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