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Major Report on the Bathroom & Shower Products - Focus On Housebuilding Market UK

A major review of the UK Bathroom & Shower Products Market - Focus On Housebuilding UK 2005-2008, has been published by AMA Research. The report is informed, comprehensive and up-to-date, and represents an aid to sales and marketing professionals involved in the industry.

The report analyses the new housebuilding market for bathroom products and is based on a research programme ofinterviews with housebuilders throughout the UK. The report analyses the new build market for bathroom products in terms of market size, key sector trends, product mixes, market share, key suppliers and distribution channels.

Assessment of market developments have been based upon both quantitative and qualitative assessments of both primary and secondary source data. Interpretation of relevant data has been undertaken to explore and support trends within new housebuilding bathroom products market and to provide a basis for forecasts of future prospects. This 118 page report is available now and is priced at £595.

Summary
In 2004, housing completions were estimated at around 178,000, an increase of 7% since 2000. The volume of bathroom product installation in the new housebuilding sector has increased considerably in recent years. The main reason behind this change is both the quantity and quality ofthe bathroom/en-suite facilities. Housebuilding companies are attempting to gain a stronger position in an increasingly competitive market through a higher volume and increased specification of bathrooms products to meet consumers' developing tastes.

Traditionally, the new housebuilding sector has always been volatile, with levels of housing starts and completions affected by the general level of economic and consumer confidence. The housebuilding sector is also highly susceptible to fluctuations in interest rates and inflation.

The number of completions is currentiy lower than the levels seen in the early-mid 1990's and in 2001 were the lowest recorded for at least 20 years. Latest official figures show that the number ofprivate sector new house completions in Great Britain rose by 3% during 2003 to reach 175,000 and has a further 2% in 2004 to 178,700 of which, 158,000 were in the private housing sector.

Housing completions are only expected to achieve moderate annual growth levels of approximately 3-4% to reach an estimated 188,300 by 2006. Factors such as the limited availability and the increasing price of land, and lengthy planning approvals process could all impact on the overall completions level.

During 2004, the top 20 national housebuilders accounted for just over 48% of total new housing completions. The leading national housebuilders are Barratt Developments, George Wimpey and Persimmon. In recent years, the industry has lost a considerable number of smaller housebuilders as a result of mergers, takeovers and acquisitions. The main result of these activities has been the emergence of a leading group of five companies who accounted for over 31% of the market in 2004.

During 2004, the overall bathroom products market was estimated to be worth £918 million at manufacturers selling prices. The new build sector for bathroom products during 2004 accounted for approximately 16% of the overall total market with an estimated value of £151 million, up from £129 million in 2001. This share gain can be attributed to the increased volume of bathroom products being installed in new houses and the general shift to better quality and slightly higher value fittings. The following table illustrates the market for new build bathroom products by area of installation: -

Sanitaryware still maintains its position as the largest product sector in terms of value, with 33% of the new build market, followed by shower enclosures, trays and bath screens (24%), shower controls (20%) and baths and brassware, with 12% and 10%. The shower enclosure sector has increased in recent years in line with the higher level of installations.

The use of prefabricated bathroom pods has become increasingly popular among housebuilders in recent years. Bathroom pods are widely used in the construction of high-rise apartments and other commercial buildings such as hotels, where a standardised design is required on a high level. By incorporating bathroom pods, the build time of a project can be reduced and lower levels of specialist electrical and mechanical sub-contractors are required on site.

In terms of the technical and brand specification, the research indicated that the decision is increasingly taken at head office/group level, albeit with input from regional offices. This is mainly due to increasingly onerous legislative and product standards, with the emphasis placed upon the housebuilders to ensure compliance. In addition, many housebuilders operate with nation-wide purchase agreements for bathroom products. Housebuilders main focus is on product specification and the quality and value of the products installed.

In terms of major source of supply, builder's merchants continue to dominate the new build bathroom, due to their stock levels and delivery capabilities. Even though many housebuilders are setting up purchase agreements directly with a manufacturer, the responsibility of physical purchase is often left to the subcontractor/installer who generally purchases from a builders merchant.

The overall prospects of bathroom and shower products within the new housebuilding sector are good with the sector forecast to experience moderate growth of around 4% over the next five years. Some sectors such as showers and brassware are expected to achieve higher growth than baths and sanitaryware for example, particularly in terms of value, influenced by the trend towards added-value products in this sector.

Tel: 01242 235724
Email: mailto:marketing@amaresearch.com
Web: http://www.amaresearch.co.uk

Experience Hotpoint at 2005 Launch

Hotpoint's new Experience range was showcased at a launch event held at the Cumberland Hotel, London. Complementing Hotpoint's collection of built-in appliances, the Experience range is available in two finishes: Stainless Steel and Titanium Glass. Both are modern and stylish and utilise state-of-the-art technology, including touch controls on the top-of-the-range Steel models.

Making the most of this design, Hotpoint's Experience collection is available across the complete range of built-in appliances from cooking to dishwashing and even includes a new fully automatic coffee maker. Key sell up features, combined with reasonable price differentials, provide retailers with new opportunities from a trusted and recognised brand.

The Titanium Glass finish is a new design that is a modern alternative to stainless steel. It represents a sleek, contemporary finish that will coordinate with both stainless steel and glass and makes a design statement in the kitchen.

Neil Tunstall, Marketing Director, Indesit Company, comments: ‘This is an exciting year and an important launch for Hotpoint built-in. The new Titanium Glass finish will complement the most stylish of kitchens and Touch Controls allow us to maintain our position at the cutting-edge of innovation and technology. Our new Experience range is design-led offering the ultimate in sophistication, but it also offers exceptional performance and superior quality.’

Tel: 08701 50 60 70
Web: http://www.hotpoint.co.uk

Shires Bathrooms and HPS Form Strong Business Partnership

Bathroom manufacturer, Shires Bathrooms and independent merchant, Heating Plumbing Supplies (HPS) have pooled their knowledge of the bathroom sector to form a business partnership whose aim is to offer improved customer service and easier product selection.

The relationship is a natural progression for the two companies who have recently been working on a number of joint initiatives, one of which is a new colour brochure. The HPS branded colour product brochure has been produced by Shires Bathrooms so that HPS can provide its customers with an easy reference guide to help make their job easier.

The brochure includes a wide range of suites, sanitaryware, brassware and furniture, along with product dimensions and a price list. All Shires Bathrooms products are finished to the highest quality, and feature traditional and contemporary style products, which is a key benefit to HPS which needs to give customers a broad product offering.

Kenny Cameron, General Manager at Shires Limited says: ‘HPS is a valued client of ours, so to be able to take that one step further and provide the company with a tool, which will ultimately help grow its business, is another way of strengthening our already successful relationship.’

HPS is a Southern independent merchant with twelve branches serving London, Kent, Surrey, Sussex, Hampshire and Berkshire. Having only started trading in October 2001, the merchant already has an impressive client list including BSW Heating, C Watkins, United House, Robert Heath, Billings and Hathaway, Swale Heating and EPS Group.

Ron Walker, Managing Director of HPS says: ‘We are delighted to be working so closely with Shires Bathrooms. It’s a benefit to be able to show our customers the wide range of Shires Bathroom products available from all the HPS branches via one neat catalogue.’

To find out more about Shires Bathrooms, please call 0870 160 4414 or visit http://www.shires-bathrooms.com or contact Heating Plumbing Supplies on 01273 511100 or visit http://www.hpsmerchant.co.uk

Franke Launches Online Survey to Find out More about Customers’ Needs

With an increasing number of people tapping into the internet to find out more about a product they plan to purchase, Franke has launched an online survey to look at how its site could be improved to better meet visitors’ needs.

The leading sink manufacturer is aware that the internet has become an important research tool for customers, and is keen to ensure that the site meets changing requirements.

John Swain, product manager for Franke UK, commented: ‘Not only have we recorded a 65 per cent increase in visitor sessions between February 2004 and February 2005, but with an ever increasing number of products in the Franke range we want to ensure that people can easily find what they’re looking for.

‘The results of the last website survey resulted in a few good initiatives, including the ‘help me choose’ section of the site and the new multimap feature, which enables people to locate their nearest Franke dealer very simply.

‘It’s also important to get feedback from retailers because the website’s a valuable resource for them to gain knowledge and understanding of the Franke range for when customers visit showrooms.’

The survey, which will run for three months, consists of 11 questions and should only take six minutes to complete. Everyone participating will be entered into a prize draw to win one of six Grand Gourmet knife sets from WMF worth £149.00.

To complete the survey, visit http://www.franke.co.uk

Tel: 0161 436 6280

Colin and Justin ‘Trade Up’ with Ceramica Dolomite

Ceramica Dolomite has teamed up with TV house designers, Colin McAllister and Justin Ryan for a number of projects, the first of these being to create a consumer advertisement for the expanding bathroom brand.

Colin and Justin have presented a number of television programmes including BBC2's hugely successful series, Million Pound Property Experiment, which saw them buy, renovate and sell seven properties across Britain, and BBC 1's popular design show, Trading Up. They write design features for a wide range of publications, including BBC Good Homes, World of Interiors and Home magazine. The recent series, How Not To Decorate has further helped raise their profile within the world of home interiors.

The new Ceramica Dolomite advertisement will be placed in the May issues of home interest publications. In addition to the advertisement, Colin and Justin will be speaking at the Ceramica Dolomite retailer and press event at the Bathrooms and Kitchen Expo on May 9th.

'Colin and I have a reputation for adding value through design,’ says Justin,
'Ceramica Dolomite has a similar culture - mixing style with value - we are delighted to be associated with the brand.’

Ceramica Dolomite is a retail only brand offering attractive, functional and affordable solutions for contemporary bathrooms. Styled to inspire and including a wide selection of brassware, the extensive collection has a variety of suites for every taste and budget.

For further information contact Ceramica Dolomite on 01782 645406 or visit http://www.ceramicadolomite.co.uk

KBSA Supports New Quality Scheme

The KBSA has announced it will support the government’s proposed new Quality Scheme, which may be launched this spring.

The new Quality Scheme will replace the old Quality Mark Scheme, which failed to win industry support.

The KBSA has met with a DTI consultant who is working on behalf of the government to secure the support of trade associations for the new scheme.

‘We are looking positively at the new scheme as the objectives match our own and are to be applauded. These are to eliminate rogue traders from the industry and provide consumers with a recognised badge for reputable tradesmen,’ says KBSA Chief Executive Graham Hayden.

‘We have raised with the DTI our concerns over why the last scheme failed and how this new scheme will be different.

‘The main difference between the schemes is that this time the existing trade associations that already uphold standards within the industry will be asked to monitor and control the programme as Scheme Operators.

‘Initial indications show that the KBSA already fulfills most of the criteria that the government would be looking for in Scheme Operators. We also feel that if successful the new scheme will present an opportunity to promote the important KBSA messages to more consumers under the Quality Scheme banner.

‘At this point in time we have registered our support and await notification from the Government that the scheme will proceed.’

De Dietrich Launches Consumer Advertising Campaign

To celebrate both its 25th anniversary in the UK and Ireland together with the launch of its expanded new range, De Dietrich is running a heavyweight press advertising campaign and – for the first time – using national newspaper weekend supplements as well as its traditional schedule of quality home interest magazines.

Using research conducted by its Media Planning Agency, Interaction Media, it is targeting the quality AB audience with high disposable incomes that can be generated from advertising in weekend supplements, which often feature food and cooking within their editorials. This campaign will go hand in hand with monthly magazines aimed at those who are looking to purchase quality kitchen appliances.

The theme for the creative is ‘AT DE DIETRICH, ALL OF OUR RANGE...IS TOP OF THE RANGE’ which embodies the ethos of 2005 built – in appliance range. The aim of the campaign is to make the De Dietrich quality available to a wider audience by emphasising the fact that all ovens in the range, pyrolytic and non pyrolytic are built to the highest specifications. They offer many features that would normally be associated with top of the range models only. An expanded range of gas hobs, hoods and refrigeration products are available along with upgraded dishwashers and laundry products.

Creative executions will appear in the Times Magazine, Guardian Weekend, Sunday Telegraph Magazine and the Observer Food Monthly along with Good Housekeeping, Waitrose, House and Garden, Homes and Gardens, Country Living, 25 Beautiful Kitchens, 25 Beautiful Homes and Period House. A series of advertorials will appear in the Independent Magazine and Period House as well.

De Dietrich sales order processing (trade only): 01256 308 067
Email: mailto:builtinsales@elcobrandt.com
Web: http://www.dedietrich.co.uk

Graham is Pilkington's Sales Champion

The Pilkington's Tiles Group has appointed as group sales director the man who managed its strategy for and successful development of the distribution and multiple retail sectors.

At a time when many directors are considering winding down, Graham Ashcroft, 57, is stepping up a gear after 18 years with the group, the past six months under the ownership of Surface Coatings.

Graham joined Pilkington's as national accounts manager but it was as general sales manager that he formed direct relationships with the major national retail and distribution groups and consistently increased turnover.

He was then promoted to retail sales director but it is his most recent appointment that will bring all sectors of the group's sales function - distribution, specification, housebuilding and merchants as well as retail - under one umbrella.

Graham credits his FMCG background and the combination of sales and management experience before Pilkington's for his success in the tiling industry.

This began straight from school, followed by eight years in retail management.
He then went on the road with Burton's Biscuits as key account manager, moving to international Wander Foods (Ovaltine) as national field sales manager, and eventually Guinness where he was divisional manager for the north-west.

'For the first time in my 18 years with Pilkington's I have the opportunity to develop all sectors of our business. I am incredibly motivated by that and am enjoying every minute of it, coming as it does at a time of great potential for the group that is revolutionising the rate at which it brings new products to market.'

Married for 37 years and with two sons, his personal passion is music and he frequently plays the drums for a selection of bands at charity functions.

Tel: 01202 672741

Record Sales for Chartley

Chartley has announced a record month for sales in January 2005 of Ovale & Rettangolo products. These designs by Prospero Rasulo were launched at KBB2004 and are sold exclusively via carefully selected choice retailers throughout the UK.

Ovale with its soft lines and Rettangolo’s precise clean cut characteristics have in their offer the entire bathroom solution making each range the finishing touch to any bathroom with various configurations to complement the basin, bath, shower and accessories.

If you would like a catalogue then please contact the sales office on 01785 811836.

Electrolux Household Appliances Honoured with Six Good Design™ awards

Kitchen appliances from the Electrolux Group have been honoured with six prestigious Good Design awards, one of the oldest and most important design competition worldwide, established by the Chicago Athenaeum Museum of Architecture and Design in 1950.

'We are excited and honored to win the Good Design awards. It is evidence that our global design approach based on consumer insight is appreciated by both consumers and the design community,' says Henrik Otto, head of design at the Electrolux Group.

The six winning products from the Electrolux Group are:

• Electrolux Full Alu - electric built in multifunctional oven, designed by Roberto Pezzetta.
• Electrolux Range Cooker - semi professional cooker, designed by David Kynoch, Mark Baxter and Paul Flowers.
• Electrolux Visao - microwave oven, designed by Alexandre Barros Neves and Duncan McCall.
• AEG-Electrolux Neue Klasse - a fridge freezer with LCD display on the door, designed by Alexandre Barros Neves, Michael Farrell, Martin Beeh.
• Electrolux Fabri Guard - twin tub semi-automatic washing machine, designed by Swaminathan Iyer, Andrew Cameron, Nina Sirelius, Martin Alexanderson, Sharad Dahake, Alwar District, Shah Jahandur, Rajasthan, India.
• Electrolux ICON™ - convection wall oven, designed by Bob Martin, Kent Crookshank, Victor Cascianelli, Frank Downing and Bob McCoy.

The Good Design Awards is organised by the Chicago Athenaeum Museum of Architecture and Design. The Museum's historic Good Design programme was founded in Chicago in 1950 by Edgar J. Kaufmann, JR. with the participation of some of America's most important designers: Eero Saarinen, and Charles and Ray Eames, Alexander Girard, George Nelson, Florence Knoll, Harry Bretoia, Finn Juhl, and Russel Wright.

Photos of the winning products are available on: http://www.electrolux.com/gooddesign

Masco Corporation Business and Financial Highlights

Masco Group net sales from continuing operations for the first quarter increased 10 percent to over $3.0bn, primarily from organic growth, with North American sales increasing eight percent and International sales increasing 17 percent. In local currencies, International sales increased seven percent compared with the fourth quarter of 2003. The Company’s sales growth benefited from market share gains, new products and positive economic conditions impacting the new home construction and home improvement markets.

In accordance with SFAS No. 144, ‘Accounting for the Impairment or Disposal of Long-Lived Assets,’ the Company has accounted for the 2003 dispositions (Baldwin Hardware, Weiser Lock and The Marvel Group), the 2004 dispositions of Jung Pumpen, The Alvic Group, Alma Kuchen, E. Missel and SKS Group and the remaining 2004 planned dispositions of certain other European businesses as discontinued operations.

• Sales of assembled cabinets, installation services, windows and plumbing products were particularly strong in the quarter.

• Income from continuing operations for the quarter was $247 million (excluding a non-cash, after-tax charge of $141 million for goodwill impairment pertaining to certain European operations) compared with $196 million (excluding a non-cash, after-tax charge of $42 million for goodwill impairment pertaining to certain European operations) for the fourth quarter of 2003. Reported income from continuing operations, including the goodwill impairment charges, was $106 million and $154 million for the fourth quarter of 2004 and 2003, respectively.

• Excluding the charges for goodwill impairment in both periods, earnings from continuing operations were $.55 per common share for the fourth quarter of 2004 and $.41 per common share for the fourth quarter of 2003.

• Including the charges for goodwill impairment in both periods, earnings from continuing operations were $.23 per common share for the fourth quarter of 2004 and $.32 per common share for the fourth quarter of 2003.

• Expected results for the fourth quarter of 2004 were adversely impacted by lower than anticipated margins in the installation and other services segment as well as certain other businesses principally resulting from the time lag in implementing price increases related to material cost increases. As previously communicated the Company has experienced substantial cost increases for insulation over the past 16 months and significant cost increases as well for non-insulation products that the Company installs. Historically, the Company has generally been able to increase its selling prices to reflect certain material cost increases. However, the Company has not yet been able to increase selling prices to offset all such cost increases contributing to a decline in operating profit margin. In developing the previous fourth quarter guidance it was anticipated that margins would be in the range of 14.0 to 14.5 percent versus the 12.0 percent actually achieved in this segment.

• Results for the fourth quarter of 2004 benefited from pre-tax gains from the sale of financial investments of $40 million or $.06 per common share after tax partially offset by a pre-tax impairment charge of $21 million or $.03 per common share after tax related to the Company's investment in Furniture Brands International common stock. Results also benefited from a reduction in the Company's tax rate related to the utilisation of foreign tax credits generated in the fourth quarter on distributions of foreign earnings which benefited earnings by $.02 per common share.

• In the fourth quarter of 2004, the Company repatriated cash related to accumulated earnings from certain of its foreign subsidiaries to the United States of approximately $500 million.

• The Company previously announced, in the first quarter of 2004, the planned disposition of several European businesses that are not core to the Company’s long-term growth strategy. During the fourth quarter of 2004, the Company completed the additional sale of three of these businesses: Alma Kuchen, E. Missel and SKS Group.

• Sales to key retail customers in the quarter were comparable to the fourth quarter of 2003, partially reflecting the impact of adverse weather in certain parts of the country, which contributed to relatively slow sales of architectural coatings. The Company's other distribution channels experienced strong growth in the fourth quarter of 2004.

• Sales increases by segment, which were substantially all organic growth, in the 2004 fourth quarter versus the 2003 fourth quarter were:

* Cabinets and Related Products sales increased 12 percent;
* Plumbing Products sales increased 9 percent;
* Installation and Other Services sales increased 12 percent;
* Decorative Architectural Products sales increased 2 percent; and
* Other Specialty Products sales increased 9 percent.

• Gross margins were 29.7 percent in the fourth quarter of 2004 compared with 30.8 percent in the fourth quarter of 2003. Operating profit margins as reported were 7.1 percent in the fourth quarter of 2004 compared with 12.1 percent in the fourth quarter of 2003. Excluding non-cash, pre-tax charges for goodwill impairment of $168 million in the fourth quarter of 2004 and $48 million in the fourth quarter of 2003 and pre-tax income related to the Behr litigation of $1 million in the fourth quarter of 2003, operating profit margins were 12.6 percent in the fourth quarter of 2004 compared with 13.8 percent in the fourth quarter of 2003.

• Results in the fourth quarter of 2004 include the positive impact of higher sales volume, which was offset by the negative effect of previously communicated increases in a number of operating expenses, including such items as certain commodity, freight, energy and other petroleum-based products, as well as costs and expenses associated with complying with the new requirements of the Sarbanes-Oxley Legislation.

Full-Year 2004
• Net sales from continuing operations for 2004 increased 14 percent to $12.1 billion compared with $10.6 billion for 2003. North American sales increased 13 percent and International sales increased 21 percent. In local currencies, International sales increased 10 percent.

• Excluding the charges for goodwill impairment, earnings from continuing operations for 2004 were $2.35 per common share, compared with the Company's most recent guidance of $2.31 to $2.35 per common share, and $1.70 per common share for 2003.

• For the full-year 2004, income from continuing operations was $930 million compared with $790 million in 2003, including non-cash, after-tax charges for goodwill impairment of $141 million and $47 million in 2004 and 2003, respectively. Earnings from continuing operations were $2.04 per common share compared with $1.61 per common share in 2003, including the non-cash, after-tax charges for goodwill impairment.Ý Sales of the Company’s products continued strong in 2004 with low double- digit increases in internal sales growth of assembled cabinets, installation services, faucets, architectural coatings and vinyl and fibreglass windows and doors.

• For the full-year 2004, key retailer sales were $3.7 billion, an increase of approximately 10 percent over $3.4 billion for 2003.

• Sales increases by segment, which were substantially all organic growth, for 2004 versus 2003 were:

* Cabinets and Related Products sales increased 14 percent;
* Plumbing Products sales increased 14 percent;
* Installation and Other Services sales increased 15 percent;
* Decorative Architectural Products sales increased 11 percent; and
* Other Speciality Products sales increased 17 percent.

• Gross margins were 30.8 percent in 2004 compared with 30.7 percent in 2003. Operating profit margins as reported were 13.0 percent in 2004 compared with 14.0 percent in 2003. Excluding non-cash, pre-tax goodwill impairment charges of $168 million in 2004 and $53 million in 2003, income related to the Behr litigation of $30 million in 2004 and $72 million in 2003, accelerated benefit expense of $16 million in 2003 and the European charges of $54 million in 2003, operating profit margins were 14.1 percent in 2004 compared with 14.5 percent in 2003.

• Full-year 2004 gross margins and operating margins include the effect of:

- Increased commodity costs which were not offset due to the delay in implementing selling price increases;
- Increased energy and freight costs;
- Stronger foreign currencies resulting in increased International sales which have lower margins;
- Product mix and relatively higher sales in segments with somewhat lower margins;
- Costs associated with complying with the new requirements of the Sarbanes-Oxley Legislation; and
- Increased expense associated with stock options.


2005 Outlook
• The Company believes that it will achieve further organic sales growth in 2005, and, based on current business trends, believes that it will achieve record sales and earnings for 2005 with full-year earnings from continuing operations expected to be at an all-time record in a range of $2.40 to $2.50 per common share.

• The Company's guidance is based on housing starts declining five percent from 2004 levels, share repurchases of a minimum 12 million common shares, modest margin improvement reflecting selling price increases offsetting rising commodity costs and anticipated income from the sale of financial investments. The guidance also assumes no further significant commodity cost increases.

• The Company experienced greater-than-expected commodity cost increases in late 2004 which reduced expected gross margins in the fourth quarter. These higher costs are continuing in 2005 and will likely have an adverse impact on first half results. The Company is implementing additional price increases on a number of its products and believes by the end of the second quarter that most of these commodity cost increases will be largely offset.

The Company believes that the impact of these recent cost increases and shortages of certain materials will reduce earnings by approximately $.05 to $.10 per common share in the first half of 2005, largely in the first quarter.

Web: http://www.masco.com

Schott Expects Marked Increase in Profitability for 2004/2005 Fiscal Year

International technology group Schott returned to profitability during the past fiscal year 2003/2004 ending September 30th. The company is again expecting a significant profit growth for the 2004/2005 fiscal year. During the first four months from October 2004 to January 2005, the operating result amounted to 45 million euros, thus exceeding planned earnings and last year's figure. Schott is expecting sales of approximately 2 billion euros for the fiscal year as a whole. After making adjustments for revenues from the discontinued television glass activities and the sale of the Labware Business Segment, this represents an increase of 5 percent.

At the press conference on financial statements that took place in Frankfurt am Main on February 15th, 2005, Chairman of the Management Board, Dr. Udo Ungeheuer, announced that Schott would be making above-average investments.
'During the current fiscal year, Schott will be investing 220 million euros in fixed assets - 140 million of which will be used in Germany for expanding production facilities,' he said. Key projects involve building a new plant in Singapore for the encapsulation of optoelectronic components, consolidating the future-oriented photovoltaic, solar-thermal and TFT-glass technologies, and developing Germany as a leading technological location.

Largest single investment of 100 million euros in Mainz for glass-ceramics centre of excellence
Investments totalling 135 million euros are planned for the Mainz site in 2005 and 2006. Approximately 100 million euros of this are set aside for the further development of the main plant into a centre of excellence for glass-ceramics.
This represents the largest single investment made in this site to date. Schott is expanding production capacities for 'Ceran' glass-ceramic cooktop panels and 'Robax' glass fireplace panels. Production of glass-ceramic reflectors for high-performance beamers and 'Zerodur' glass-ceramic components for astronomical and technical applications will also be expanded.

One of Schott's primary strategic objectives involves the rapid development of a distinctly stronger presence in Asia. Dr. Ungeheuer explained that an increasing number of Schott customers are producing in this region, while in Western Europe the market is dwindling for some of the important segments. Schott currently has six production sites, nine sales offices and 1,700 employees in the Asia region. 'We will invest in new production plants and take well-directed measures to boost sales,' emphasised Dr. Ungeheuer.

In doing so, the company will be focusing particularly on the growth markets of Japan, Korea, China and Taiwan. A new production facility for wafer level packaging will be commissioned in Singapore in mid-April. These investments total 15 million euros. In future, Schott will be managing the global activities of three Business Units from within the Asia region, namely, Optics for Devices, Electronic Packaging and Flat Panel Display. Schott aims to achieve at least 20 percent of global sales in Asia by 2007.

Setting a course for growth with high-tech
Besides bolstering existing core business segments such as home appliances ('Ceran' glass-ceramic cooktop panels and finished plate glass), special glass tubing and pharmaceutical packaging (ampoules, bottles and syringes) and components for the automotive industry, Schott is also taking well-directed steps to develop its position in markets for future-oriented technologies, including such high-tech areas as high-quality thin glass for flat-screen displays and solar energy. Schott says that it is the only company in the world to offer products in all areas of solar technology, namely, photovoltaics, solar heating (for hot water and auxiliary room heating) and solar-thermal power plants for centralised electricity generation.

Schott also sees favourable opportunities for leading the very attractive display glass market, which is expected to grow by 30 percent over the coming years. Schott supplies glass ranging from generation 4 formats (720 mm x 930 mm) to generation 7 formats (1870 mm x 2220 mm). Entry to the market of backlighting glass for the background illumination of flat-screen displays is also developing promisingly. Schott intends to gain a 30 percent share of this market as early as the end of 2005.

Return to profitability in 2003/2004 fiscal year
Business went well for Schott in the 2003/2004 fiscal year. The consolidated sales volume of 2.023 billion euros was 77 million euros (4 percent) higher than in the previous year, despite negative exchange effects. The share of non-domestic sales remained stable at 76 percent. The member of the Board responsible for Finance, Klaus Rübenthaler pointed out that Schott returned to profitability after achieving an annual surplus of 16 million euros after just one year. Over the same period in 2002/2003, the company experienced a shortfall of 75 million euros. The positive business developments are also an indication of the considerable improvement to earnings before interest and tax (EBIT), which increased from minus 39 million euros to plus 58 million euros.

Investments in fixed assets remained high at 179 million euros and were financed wholly out of the operative cash flow. The equity ratio remained unchanged at a satisfactory 30 percent. The solid financial structure of the Schott Group provides a firm foundation for the company's forthcoming tasks. As per the date of the balance sheet, the Schott Group employed 18,400 workers worldwide, of which just under half were in Germany.