PDF, 1.2 MB - Pfleiderer AG

54 being focused: being better
While large volumes are sold to some customers, no business unit is critically dependent
on any one customer. The dependency of the plants in Poland on furniture manufacturers with
strong sales in Germany will be reduced in future by expanding exports to neighboring eastern
European countries.
Increased activities in the wind converter area, in particular supplying wind parks, entails
components being produced in larger numbers. This naturally results in a corresponding inventory
risk.
Research and Development Risks
Risks relating to potential infringement of third-party patent rights, which led last year to a
patents rights conflict in the insulation technology area, are no longer apparent. Proceedings
were concluded by way of an out-of-court settlement. This means that no future expenses
will be incurred here.
Risks relating to technology or production processes are not envisaged, as Pfleiderer is
operating state-of-the-art equipment at least.
Production and Procurement Risks
The Company manufactures its products using continually running plants or multi-shift
operations. This means that production is largely dependent on the availability of plant and materials.
The risk of breakdowns and interruptions occurring is kept to a minimum by operating
a maintenance management system and the existence of reserve equipment and parts.
Wood processing involving chippings and dust coated with glue dried at high temperature
carries a danger of explosion or fire, a risk that cannot be entirely ruled out. Together with its
insurers, Pfleiderer has taken all the necessary technical and organizational precautions, as
well as set up contingency and catastrophe plans, should such an incident occur. Fire drills are
carried out regularly with the Company’s own fire service, together with municipal firefighting
units. Pfleiderer has largely reduced the danger of customers changing supplier during prolonged
downtimes by organizing an emergency system of replacement supplies from other
plants within the Group.
Major damage to structures, machinery and plant are covered by insurance, covering
both direct damage by fire, as well as losses incurred by production downtime. The considerably
higher excess charges now demanded for asset insurance are being met by greater efforts
to prevent fires and to limit damage.
Thanks to the almost unlimited availability of raw materials (raw wood, sand, gravel,
cement) and a sophisticated procurement policy that stringently avoids single-sourcing, the
Pfleiderer Group is not dependent on any single supplier. Having enough raw materials available
on time is ensured through purchasing logistics, together with inventory holdings. Risks
resulting from massive price increases of raw materials are not foreseeable. Setting up cogeneration
plants in which residual wood can be used as a fuel has decreased Pfleiderer’s
dependency on the price of energy.
Personnel Risks
A well-balanced age structure among production team leaders and management, together
with an attractive pay system and other schemes which bind qualified employees, means that
Pfleiderer is not facing any particular risk of losing personnel essential to the Company.