Continued stable growth in 2016, despite turbulence

Although political and economic turbulence this year has had some impact on sales, the KIRCHHOFF Group has survived these uncertain global times with continued stable growth.

In total, the KIRCHHOFF Group will achieve around 2 billion Euros in sales this year, with its four business areas, Automotive, Ecotec, Mobility and WITTE Tools; this will represent an 8% increase from the previous year. The KIRCHOFF Group currently employs around 11,500 employees in 51 plants across 18 countries.

Due to the positive global economic cycle and stable sales figures in the automotive industry in the past year, KIRCHHOFF Automotive will achieve 1.45 billion Euros in sales in 2016 – up more than 7% year-to-date. KIRCHHOFF Automotive has around 9,000 employees globally.

At the beginning of December, this international automotive supplier from South Westphalia also took on the remaining shares in the Canadian company Van-Rob Inc. from the firm's founder and co-shareholder Peter van Schaik. This concluded the process of incorporation into a global corporate network for KIRCHHOFF Automotive, which started in 2011.
In this context, a new global management structure was implemented in order to effectively and efficiently pool global expertise.

KIRCHHOFF Automotive is recording growth of approximately 8% in Europe this year, and is therefore 7% above the overall value of car sales in Western Europe. In the NAFTA area, sales figures are stagnant and will remain at the level of the previous year. The Chinese automotive market continues to enjoy double-digit growth, at 20%, as also reflected in the build-out sites in China.
In October, almost 263,000 cars were newly approved for circulation in Germany, as were 2.8 million units since the beginning of the year. This represents a year-to-date increase of almost 5%. Within commercial vehicles, light commercial vehicles (transporters) are in particularly high demand, and a 10% sales increase in this sector will be achieved in Germany this year. In contrast, we have seen declining demand for heavy commercial vehicles of over 6 tonnes; however, the sales trend is still at +4%. Overall, the global production of cars and commercial vehicles will increase from 2016, and the forecasts for 2017 are very positive.

Based on this trend, the company has invested in new highly and fully automated production technologies at numerous sites. This has enabled the American plants to start up new types of production runs as part of more demanding customer orders. In China, the largest automotive market in the world, demand for aluminium lightweight solutions for body panels continues to be high. This is also reflected in the many new orders that the Chinese plant in Suzhou has obtained, particularly from Cheery Jaguar Land Rover. In northern Shenyang, the second press plant went into operation in the fall, which will in the future also produce parts for BMW. One objective of the new sales office in Seoul, Korea, is to further develop contact with the customers like Hyundai and Kia, as well as GM Korea.

The situation in the European plants this year is also very satisfactory. In Poland, a new plant is starting up in Gniezno; which will supply the VW plant that was recently inaugurated in Wrzesnia; where the VW Crafter will be assembled. The fifth press hardening line in Gliwice, Poland, was also launched, while the Mielec plant was extended to install larger machinery. In Esztergom, Hungary, a logistics centre was set up and the infrastructure was improved.

The KIRCHHOFF Automotive sites in Iserlohn and Attendorn, Germany, will again record increases in sales figures. With over 800 employees, 37 of whom are trainees, the plant in Attendorn will achieve 144 million Euros in sales this year, representing a 15% increase. The Iserlohn and Hagen sites with 670 employees, of whom 35 are trainees, will achieve total sales of 150 million Euros in 2016. An innovative welding procedure is now in use in Iserlohn, for the production of the crossmember frame for the Daimler Actros. This process achieves efficient welding speeds, saving us money while ensuring optimum quality. Investments were made into a new welding system and the necessary, associated periphery for an additional customer project that will start in January of 2017. In Attendorn, a new speed-welding cell is in use to produce wheelhouse reinforcements for the Audi A4 and A5. Many new projects for clients including VW, Porsche and Daimler have been successfully launched. The projects for the VW Tiguan and Touran are worthy of particular note as they are running at high quantities in spite of the VW diesel crisis.

The Group is particularly proud of a series of awards from important automotive manufacturers. Among others, the KIRCHHOFF Automotive plant in Iserlohn was presented with the Volvo Group Purchasing Supplier Award for outstanding services and sustainable improvements. General Motors and Ford also certified several plants for first-class quality.

Geopolitical and economic circumstances globally are becoming more complex and more volatile. This makes it all the more important to recognize current trends in good time and provide a great deal of flexibility and diversification, with respect to both the client and product portfolio. This is a strength that the KIRCHHOFF Group has proven to have over the course of centuries. Research and development in the Group has focused for some time on matters such as e-mobility, autonomous driving, networking, lightweight construction and reducing CO2 emissions. "These issues have crucial influence on future cars, and therefore also on our products and manufacturing processes. This is a challenge we are glad to take on," said managing partner J. Wolfgang Kirchhoff at the press conference.

Adding technological value through vision & innovation

KIRCHHOFF Ecotec has increased its sales by 10% this year. This includes the takeover of Provence Bennes (PB) Environnement, a manufacturer of body components from Lambesc, southern France, by the FAUN Group. PB Environnement specializes in the production of light waste collection vehicles made of aluminium. With the incorporation of PB Environnement into the group of companies, FAUN is extending its product range and strengthening its international service network.

The brands ZOELLER, FAUN and HIDRO-MAK have presented new products at the leading industry trade fair IFAT. The two German suppliers focused on the new side-loader variants – an innovative system for removing underground containers and on space-saving disposal of stationary containers with side-loader systems, as it is used in Spain and South America for example. ZOELLER added the Delta 2316 Premium to its lifter range and offers equipment for rear end loaders in the form of CLEAN OPTION, which significantly reduces the loading personnel's exposure to dust, germs and smell. For the first time in KIRCHHOFF Group, the Turkish company HIDRO-MAK presented a new rear end loader. Due to continued turbulence in the geopolitical situation, the companies are concentrating on developing in new markets such as South America or Australia. In the sweeper segment, FAUN has developed the VIAJET 4. This is a truck-mounted sweeper for the American market, and a supplement to the larger 6 m³ version. This vehicle is used primarily in the suburbs. The service network continues to be built out significantly in all companies, in order to take into account customer requirements for perfect service and prompt delivery of spare parts. ZOELLER Group opened a new lifter system assembly hall in the Czech Republic.

With the guiding principle of Industry 4.0, the companies FAUN, ZOELLER and HIDRO-MAK addressed questions on the future of disposal logistics. There, the challenge is to get away from considerations relating to actual products, and instead look at future needs in disposal logistics. Time saving, greater convenience and personal freedom of action are essential requirements in personal waste disposal, while commercial concerns have to do with technology and logistical solutions. It's conceivable that waste collection vehicles will play a greater role in future and for example that waste bins, will automatically provide notifications when necessary, and that the relevant vehicles are only used when disposal is required. "We must successively refine our product, digitilize the disposal logistics process and work with our customers to create future trends. "When it comes to it, if we notice trends too late, we will lose market share and our customers," commented Dr. Johannes F. Kirchhoff, managing partner of KIRCHHOFF Group, on the subject of future challenges.

KIRCHHOFF Mobility has continued to grow in the past year, and the integration of new sites saw particular progress. Due to the difficulty of recruitment in southern Germany, the business area of Mobility was separated from the Kirchdorf site. 10 sites are now operating across Germany, Austria and Switzerland, plus one collaborative site in Dresden.

At the end of the year, REHA Group Automotive GmbH & Co. KG and Jelschen GmbH will transition into KIRCHHOFF Mobility GmbH & Co. KG; meanwhile, Pruckner GmbH in Tresdorf, near Vienna, will be renamed KIRCHHOFF Mobility GmbH. This means that this business area is now consistently represented under the KIRCHHOFF Mobility umbrella, and it is easier for all customers to identify the individual sites. At the same time, the structure of the Mobility business area is becoming leaner and more hard-hitting.

The widening of the product range, for example with the addition of the new VW T6 Colorado with its 130 mm-lower floor or the Ford Turneo Connect, with weightless flex ramp, represents the introduction of interesting vehicles for active or passive drivers, as well as for families or taxicabs. We have also succeeded in further developing our relationships with vehicle manufacturers through premium and other preferred partnerships.

WITTE Tools presented itself at the international Cologne Hardware Fair this year, with a new market presence and pliers; as an addition to its product range. Two product lines have also been relaunched, and further new lines have been introduced to our OEM customers in the market. In production, investments have been made in a new processing centre and a laser printing system.

G. Kirchhoff, managing partner and CEO of the KIRCHHOFF holding company, states that implementing the infrastructure requirements for digitilization, mobility, trade and financing are essential for industrial progress. "Our companies and social partners share a joint responsibility for explaining the change in the workplace to the people, to our employees. We must seize upon change and use it as an opportunity. We believe that this will all be possible if we work on a solid foundation of the values of democracy, human rights and freedom of opinion."
Values and tradition are also the foundation of the KIRCHHOFF Group, The Group's shareholders and the Kirchhoff family of entrepreneurs look to the coming year and continue to see good prospects for all business areas. The KIRCHHOFF Group expects to achieve sales of 2.1 billion Euros in 2017, representing a year-to-date increase of around 5%.

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