Foreword by Stefan Messer

As owner and CEO of the largest owner-managed industrial gases specialist, Stefan Messer has been the driving force behind the strategies adopted for the future.

We are living in turbulent times, with upheavals and changes on all fronts that strongly influence our lives and our work.

Wars, political disputes, the advance of globalisation, scarcity of resources, climate change, demographics, increasingly protectionist tendencies and the digital revolution are just a few examples of the situations and trends we must face every day.

The generations that come after us will grow up in a world different from the one we know. But they, too, will dedicate themselves to the challenges of their time, adapting their lives to changed technologies and conditions. After all, things are not all getting worse – just different.

We cannot and should not halt the advance of technological progress: digitalisation, for instance. It will encompass all areas of our lives, at the same time making many things easier, safer and more convenient for us. We have long since grown accustomed to many improved processes in our daily lives. Thus, Google has banished our tried-and-trusted encyclopaedias; thanks to Spotify, we no longer need CDs if we want to listen to music; with Uber, we can order and pay for taxis online; Google Maps and navigation systems have replaced traditional maps; today, partners for life can be found via Internet portals such as Parship; and booking travel online ourselves is simple and economical. The next steps in this revolutionary process are already on the starting blocks. Autonomous driving, 3D printers or self-replenishing refrigerators will soon become an everyday reality. In industry, the networking of data and machines can make processes more effective, and the approach to and support of customers more targeted. Implementation of Industry 4.0 will make many things even more automated, and thus more effective.

The other side of the coin however, where this digital development is concerned, is that we are all growing more transparent as our data is stored and used by others without our knowledge. The massive upturn in the use of social media such as Facebook, LinkedIn or Instagram, however, also shows that the younger generations have fewer problems with loss of privacy than their parents. 

Despite these sweeping developments, the trend for the global economy in the past year was a very positive one. The shift in economic power to Asia has continued, with the greatest rates of growth being achieved once again in this emerging region. 

But domestic industry is humming in North America, as well, even though the policies of Donald Trump are returning the focus to the nation-state. Increased reintroduction of customs duties is contradictory to free world trade; and the failure to invest in modernisation in one‘s own country can quickly place its economy at a competitive disadvantage. Europe shows signs of recovery with moderate growth rates that are partly stimulated too greatly by the low-interest policy in place at the European Central Bank. 

In the global market for industrial gases, the continued concentration on just a handful of major providers has reached a new dimension through the planned merger of Linde and Praxair. It remains to be seen how customers will respond to such a size optimisation, and whether costs and prices will in fact drop as a result of the synergies realised. For the smaller providers such as Messer, this increasingly means operating in market niches and with better service. 

In this rather disparate environment, our group of companies has developed outstandingly in the field of industrial gases. Our above-average strength in China emerged very clearly in 2017. But Vietnam, our new rising star, has also developed outstandingly. In Europe, the region of South-Eastern Europe is leading the growth scale, followed by more moderate growth in Western and Central Europe.

After years of moderate growth, in 2017 we were able to strongly boost revenue and results, and more optimal use was made of our capacities in China in particular.

Asia remains our focus for strategic investment. This is why we chose new expansion projects for the construction of air separation units in the provinces of Chongqing, Guangdong, Hunan and Yunnan. Additional projects are in preparation. In Vietnam, this year we signed agreements with our main customer, Hoa Phat, for the construction of two air separation units at the new steel location in the country’s centre, along with another, fourth unit for the existing location in the north. In Malaysia we launched our joint venture, UIG, with two filling plants for industrial gases. In Thailand, we founded a new company that started its business activities in early 2018.

In Poland, we took over the local gas company TransMatGaz; in Hungary, we successfully commissioned a third air separation unit; and in France, we signed agreements for the construction of three public filling stations for liquid nitrogen. These form the basis of a climate friendly system for the refrigerated transport of food by truck; trucks whose engines run on liquefied natural gas, i.e. without using any diesel at all. 

Due to the lower capital expenditures in 2017 and the improved results, we were able to make greater reductions than originally planned in our overall net debt. In so doing, we created a financial basis with which to secure our company in the long term with additional investments in our future.

We also registered slight growth in the areas of welding and cutting technology, and in the diagnostic devices of the MEC Group; overall, however, we have fallen short of our expectations. A necessary restructuring of the Castolin Eutectic Group has already been initiated and will lead to improved profitability in 2018. In doing so, we will expand sales and market related activities while scaling back administrative functions. At Messer Cutting Systems, the strategy was revised through a strengthening of the laser segment. A significant investment programme was decided that will future-proof our products and strengthen our technological prowess. The BIT Group was able to expand its business, most notably in the fields of haematology and molecular diagnostics.

In spite of what are certainly a host of fresh challenges for 2018, we are well positioned and will consistently pursue the strategy we have adopted, both geographically and innovatively. This includes the opening of the new Technical Centre in Krefeld, Germany.

But the new year 2018 also marks another milestone for our family business, as we shall be turning 120 years old this year.

For what has again been a comparably successful 2017, I would like to thank you for your continuous trust, loyalty and cooperation.

Best wishes,
Your Stefan Messer

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