Dürr is one of the world's leading suppliers of systems, services and products mainly for the car making industry. We achieve about 80% of our sales in the automotive business. We also supply equipment to the aviation industry, the machinery industry, and to the chemical, pharmaceutical and printing industries. About 55% of our activities are in plant engineering, 45% are in the machinery industry.
Dürr is represented in 23 countries at 50 business locations (thereof 32 with production facilities). As a systems supplier, dürr plans and builds paint shops and final assembly facilities, mainly for the automotive industry, but also for the aircraft industry. Our range of products and services also includes industrial cleaning systems, automation systems and balancing machines for the production of engine and transmission components, and also assembly, testing and filling systems for final vehicle assembly. Dürr also offers environmental technology, specifically air pollution control systems for automotive paint shops and for the non-automotive sector. 45% of the approx. 7,100 employees work in germany. The percentage of employees in the emerging markets has increased steadily to 32% in recent years.
The operating business is subdivided into seven business units. Almost all dürr business units are world market leaders in their area of activity with market shares of 30 - 50%. In the youngest division, energy technology systems, we want to introduce technologies to increase the energy efficiency of industrial processes; this will also include acquisitions. Besides a few global competitors there are some competitors in local markets.
Production depth within the dürr group of about 25% altogether is relatively low. As a result, dürr can react more flexibly in a economic downturn, and has a smaller business risk than companies with a high production depth. Material costs are rather more of a transitory nature because every order in the project business is calculated with actual material prices. Dürr achieves typically high roce-margins due to its business model as an emerging company. Due to dürr's global standing and the high share of added value in local markets, the influence of exchange rates is small.
Dürr depends on the long-term capital spending behavior of the automotive industry, whereas the short-term behavior of consumers is of less significance. In the longer term, the capital spending behavior of dürr's customers follows the development of production and sales worldwide. The market environment in the automotive industry is currently assessed very positively, with long-term global rates of 6%. Growth is driven by the emerging markets; with china in the lead. The share of the emerging markets in dürr's incoming orders of over 60% is very high.
We took our corporate strategy further forward in 2010 under the heading 'dürr 2015'. Our strategy is centered on two overarching goals: profitable growth and the continuous optimization of our processes and structures. We are focusing on five drivers to achieve our growth targets: expansion in the emerging markets, innovation, development of our service business, open up new areas of business through acquisitions and developing the new division clean technology systems. We will be continuing to pursue the performance targets we have communicated to the capital market. After a strong rise in 2011 and 2012, we aim to increase sales revenues at an average rate of 5 to 10% in the coming years.
Further expansion in the emerging markets
We are systematically expanding our leading competitive position in the emerging markets. The number of employees in these markets already rose from 14% to 32% of our total workforce in the years from 2005 to early 2012, and is to be increased to about 35% by the year 2015. We also intend to further increase local content in the areas of engineering, purchasing, and production. This will be driven both by local growth and by exports to established markets. Our continued target is for half of the Group’s incoming orders and sales to come from the emerging markets. China, now the world’s largest automobile market, is the main focus.
We will continue to increase our R&D spending going forward. Our innovation management remains focused on increasing the flexibility and optimizing the energy efficiency of our products and systems. We have higher R&D budgets than smaller competitors, and can bring new technologies to market faster and in greater numbers. Dürr’s innovation strategy also includes selective acquisitions to round out our technology portfolio.
Development of new areas of business
We are leveraging our engineering and product know-how selectively in order to expand into new areas of business that are technologically related to our core business. Our competence in realizing energy-saving manufacturing processes is an increasingly important driver. Glueing technology for the automotive industry and for other sectors is an area of business we will be expanding in the coming years. Glueing is increasingly replacing conventional joining techniques in the production of automotive body shells as it offers advantages in terms of rigidity and comfort. Glueing techniques are being used more and more in final assembly as well, for instance for windscreen and windows, for quality reasons. The technology is on the advance in other sectors, too, such as wind turbines.
We also see opportunities for expansion in automation technology. Among other things, we are currently reviewing ways in which we can transfer our technology competence to the future series production of batteries for electric automobiles.
We see filling technology as another opportunity for growth. With the acquisition of the Danish company Agramkow we can offer the full spectrum of filling systems both for the automotive industry and for manufacturers of domestic appliances.