Bosch reinforces its commitment to digital transformation

German engineering group Robert Bosch GmbH has announced to focus more on the company's transformation and its future digitalisation strategy.

Packaging technology is not part of the group’s core business – image courtesy of Bosch.

A spokesman from Bosch told The Manufacturer: “Bosch has to make the best use of its financial resources to better focus on the company’s digital transformation.”

Therefore, the company has decided to look for a buyer for its packaging machinery business (PA), more specifically the pharmaceuticals and food units of the Packaging Technology division.

“To set up and maintain a future-proof packaging business unit, we would have to invest in restructuring the unit’s process and in product development strategies, which would further encumber our financial resources.”

With the Bosch Group needing to focus on the transformation ahead, it has not identified any sufficiently relevant synergy effects in terms of business or technology that might offer the division prospects for the future within Bosch.

Focus on digitalisation  

Dr Stefan Hartung, the Bosch board of management member responsible for the Energy and Building Technology and Industrial Technology business sectors, said: “This decision will allow Bosch to narrow its focus on issues of importance for its future, such as the transformation of the Bosch Group and its future digitalisation strategy, including the internet of things, and to pool its resources accordingly.

“Both PA and Bosch will benefit from this decision. A reorganised packaging technology business will be able to adapt more flexibly to the diverse requirements of this typically SME market, while Bosch will be free to focus its attention entirely on the group’s impending profound transformation.”

Bosch’s packaging technology unit…

is headquartered in Waiblingen near the group’s global headquarters outside Stuttgart.  It has 6,100 employees in 15 countries. The business develops and produces machinery for the pharmaceuticals, food and confectionery industries. Bosch also makes a range of products from coffee machines and refrigerators to power tools. 

It also is the Bosch Group’s strategy to structure its operations competitively. Consequently, it continuously adjusts its business fields, and it is in this context that this decision has to be seen.

Good products and rising demand

Technologically, as well as because of its novel approaches and the efficient team behind it, Bosch’s packaging machinery enjoys an excellent reputation in the various industries in which it is employed. Its innovations have recently garnered awards.

Dr Stefan König, chairman of the managing board of Robert Bosch Packaging Technology GmbH, said: “Under new ownership as well, our tried and tested team will continue to provide our customers with excellent manufacturing solutions and services.

“PA has always led a largely independent existence within the Bosch Group, and will in the future be able to respond even better to the requirements of the packaging industry. Our customers will benefit from this.”

The packaging industry faces pressures

According to the Packaging Federation, the packaging industry will continue to face growing pressures from manufacturers, wholesalers, logistics and supply chain companies, retailers, government regulators and above all from consumers, to look great, prevent damage, reduce cost, cut waste and reduce energy use. 

The perfect mass-market retail package always protects what is inside and promotes the brand on the outside – with distinctive shape, unique opening method, and other instantly recognizable brand elements.  It is light-weight, compact, low cost, easy to track through the supply chain, and easy to recycle.

From a business perspective, the past two fiscal years were difficult for certain PA units. Under new management, however, the company has begun to realign, with some initial success.

Many units are now in a good position to serve the growing market. In the years ahead, the company expects to see increasing demand. With its many technological USPs, the pharmaceuticals unit is developing encouragingly and growing. The food unit has strengthened its core areas and intends to further expand its market position.

PA currently employs some 6,100 associates in its global packaging technology operations. Its aim is for all its associates and locations to be retained by the eventual buyer. Associates and employee representatives were informed of the decision today.

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