Merck KGaA | Strategy and Financial Highlights Information from ICIS

Edited from “Strategy” and 2008 annual report

Merck will continue to focus on its three pronged strategy “sustain-change-grow.” It will also continue to focus on its specialty businesses, pharmaceuticals and chemicals in 2009 and beyond. Innovation and customer focus are also key focus points of the Merck strategy.

The company will further continue to exploit opportunities and protect the company against risks. It believes it can grow from the balance between “the well established and the new, between tradition and innovation, between pharmaceuticals and chemicals”.

The three main elements of its strategy that it will focus on include:

(1) Continuing to concentrate on research-oriented specialty businesses and on driving innovations forward.

(2) Exploiting its potential for organic growth more strongly in order to improve its market position. It will invest further in regional markets, particularly China, India, Japan and the US.

(3) External growth through alliances and acquisitions is also part of its strategy.

“We seek to grow profitably while at the same time diversifying our risk within an integrated company. Our fields of endeavour are specialty businesses within pharmaceuticals and chemicals.  Our core competencies are innovative strength, fast and efficient market penetration, high quality products and processes, customer focus, excellent command of logistic processes and superior service”, says chairman, Karl-Ludwig Kley.

The pharmaceuticals business consists of Merck Serono and Consumer Health Care (CHC). Merck wants to expand both of these businesses. It says it will achieve the “key competitive edge” by expanding the biotechnology business.

It further says that it will obtain a further competitive edge through its expertise in chemistry and through the cross-fertilization of biotechnology and chemical know-how.

“We not only want to defend, but also sustainably expand, our market position in biotechnology”, says Kley.

The company will consolidate its position through targeted acquisitions and an active licensing policy. Expansion of its businesses in the US and Japan as well as China and India is another regional focus. 
  

In its CHC business, products for self-medication will be expanded further organically and via acquisitions. In Europe, it is focusing on achieving brand awareness. In addition, it is giving priority to all western industrialised countries except the US. Its focus is on four health themes: mobility, everyday health protection, women’s and children’s health as well as cough and cold.

In its chemicals business, it will continue to focus on “growing businesses in strong expanding markets and stable business in mature market segments”. The company says that it is already preparing to face increasing competition in the liquid crystals (LC) market and has the goal of maintaining a leading role in that market in the long term.

Performance and life science chemicals will continue to focus on profitable sub-segments. Its product range and customer-centric development are the factors for the further profitable development of the business. 
   

“To better diversify our risk and to put the chemicals business on an equal footing with pharmaceuticals, we want to acquire a business that is complementary to existing customer relations or technology platforms”, concludes Kley.

ICIS Chemical Business magazine has unveiled the ICIS Top 100 Chemical Companies, with rankings based on 2008 sales.

A PDF of the ICIS Top 100 Chemical Companies is available for download on ICIS connect.

See the article and analysis of the ICIS Top 100 on ICIS news.

Financial highlights: Merck KGaA, year ended 31 December

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Merck KGaA Company Structure

Merck is a global pharmaceutical and chemical company. Merck's roots go back to the year 1668, when Friedrich Jacob Merck purchased the “Engel-Apotheke” (Angel Pharmacy) in Darmstadt, which has been in the possession of the family ever since. In 1816, Emanuel Merck took over the pharmacy. From these beginnings, he and his successors gradually built up a chemical-pharmaceutical factory that produced (in addition to raw materials for pharmaceutical preparations) a multitude of other fine chemicals, and ready-to-use medicines from 1904.
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