Just in time for Drinktec, GEA is expanding its portfolio of filling valves with new options that allow manufacturers to fill an even wider range of beverages with one valve technology. The new generation of magnetic valves can be used for all filling platforms with a high hygiene level – in aseptic applications for dairy products, for example, as well as for ESL beverages with a longer shelf life.
Demand dynamics and economic pressures on the beverage industry are turning flexibility into one of the core competencies of manufacturers. Faster changeovers for smaller quantities are also in demand in the filling sector. GEA’s filling specialists have developed a new generation of valves to ensure greater product diversity without compromising on hygiene.
“Our customers want to implement product changes smoothly with as few operations as possible to work quickly and economically. This is reflected in the further development of our filling valves,” says Product Manager Massimo Nascimbeni, Filling & Packaging at GEA. “It was important to us to make the filling valves as flexible as possible so that producers can fill a wide variety of products with the same filling valves.”
Gentle, precise and flexible filling
The new generation now uses magnetic actuators with seals that require less maintenance than the usual technical solutions. A pneumatic, or optionally a servo drive, refines the lifting and lowering movements of the control and shut-off valves. This means that beverages are processed gently and very precisely, which is particularly important for viscous liquids or pressure-sensitive particles, such as fruit, cereals, nuts and seeds (up to 6x6x6mm) or fruit pulp (up to 3x20mm).
To reduce the number of components on this new generation of filling valves, that would require service and warehouse logistics, GEA saved on number of actuators with no compromise on performances. In addition, the new filling system eliminates the need for dummy bottles by ensuring an efficient sterilization position with only one magnetic joint.
The new modules in GEA’s filling valve portfolio are suitable for all platforms designed for sensitive beverages. These include aseptic liquids such as dairy products and extended shelf life (ESL) beverages, which can be clear or contain fibers. Even changeovers between the extremes of non- and highly carbonated beverages are possible without much effort.
GEA at Drinktec 2022: hall A3, booth 373
Starting in mid-July 2022, GEA and Israeli start-up Better Juice will conduct product tests on behalf of beverage manufacturers looking to lower the sugar content in drinks. To provide the service, the new GEA Better Juice Sugar Converter Skid, which the industrial systems supplier developed based on the Better Juice process, has been installed at the GEA Test Center in Ahaus, Germany. With this innovative solution for the juice industry, GEA is raising the profile of the Ahaus facility as a key hub for piloting aseptic processing and filling of sensitive foods and beverages.
Test Center provides solutions for unique product requirements
“We can now collaborate with our customers at the Test Center to strike the ideal balance between a sweet note and reduced sugar content,” says Gali Yarom, co-founder and joint CEO of Better Juice. To that end, the microbiologists from Better Juice will join forces with GEA’s specialist engineers to support and guide companies in running trials. The GEA Test Center at Ahaus will provide laboratory services dedicated to testing all important analytical parameters.
“It’s often necessary to initially demystify innovative solutions like the Better Juice process. That’s why it’s all the more important to make the case for the technology with manufacturers in person,” says Sascha Wesely who leads the Non-Alcoholic Beverages business at GEA. “The Ahaus trials help us optimize process efficiency right from the outset. By running scalable tests under real-life conditions, we significantly cut the time to market.”
A scalable, enzymatic solution to removing up to 80 percent of sugar from fresh juices
Thanks to a patented enzymatic process, this is the world’s first solution that naturally reduces the sugar content of fruit drinks by up to 80 percent, without affecting its nutritional value or authentic taste. The juice flows continuously through a bioreactor containing GMO-free, immobilized microorganisms which convert simple sugars into prebiotic, non-digestible molecules that benefit the intestinal flora. As a result, the GEA Better Juice Sugar Converter Skid succeeds in removing up to 80 percent of the sugar in natural fruit juices, concentrates as well as fruit-based mixtures, such as purees. At the end of 2021, the partners won their first commercial order from a company in the U.S. where, once integrated into production, the system will create juices with much less sugar.
Better Juice partners with GEA and US juice maker to commercialise reduced-sugar juices.
FoodTech start-up Better Juice, Ltd. sealed its first commercial deal to bring reduced-sugar juices one step closer to supermarket beverage aisles. The company inked an agreement with a major US fruit juice manufacturer for commercial installment of its sugar-reduction technology.
This is Better Juice’s first official commercial venture in its long-term collaboration with GEA Group, AG, Germany, a world leader in process engineering for the food and beverage sectors. The two companies joined forces in a strategic move to scale up and promote the sugar-reduction technology throughout the global beverage market.
Start-up receives patent and a self-affirmed GRAS approval
Better Juice was granted a patent for its sugar-reduction enzymatic process in Europe. Armed with recent self-affirmed GRAS status, the company is out to market its innovative system to food and beverage manufacturers worldwide. “These achievements, together with GEA’s knowhow and cutting-edge technology, will open doors to work more closely with food and beverage companies,” explains Eran Blachinsky, PhD, co-founder and co-CEO of Better Juice.
Better-Juice’s patented enzymatic technology uses all-natural ingredients to convert fructose, glucose, and sucrose sugars into prebiotic and other non-digestible fibers. The juice passes through a continuous flow bio-reactor housing non-GMO microorganism that transform the unwanted sugars into beneficial, non-digestible molecules. It boasts capabilities to reduce sugar loads by up to 80 %, while preserving the full complement of vitamins and other nutrients inherent in the fruit. The process moderates the sweetness of the juice, while intensifying the fruit flavour.
Sugar-reduced juices will line the shelves next year
Under the new venture, GEA will design, manufacture, and install the bioreactor that reduces sugars, and offer follow-up technical support. Better Juice will produce the microorganisms for the enzymatic process. According to the first commercial order, the fruit drinks manufacturer will produce natural juices with a minimum sugar reduction of 30 %, and anticipates the product to arrive in supermarkets by spring 2022.
“This new agreement marks an exciting milestone in our mission to get our sugar-reduction technology off the ground, to penetrate the US market, and to expand our global footprint,” enthuses Blachinsky. “We’ve officially launched our drive to help consumers enjoy reduce sugar in their favourite fruit juice.”
“Scaling up is always a challenge,” confesses Gali Yarom, co-founder and co-CEO of Better Juice. “But when your partner is GEA, with its vast industrial food processing capabilities and global presence, the acceleration of the Better Juice commercialisation is much faster and brings added value to the supply chain. Imagine—in just a few months, affordable, reduced-sugar fruit juice will be a ready option for American consumers.”
The equipment has been tested in GEA’s quality assurance facility in Germany and can be easily integrated into existing juice production lines, providing product at a capacity of up to 200 liter per hour. Total production capacity of reduced-sugar juices can be adjusted to the manufacturer’s needs.
“Better Juice has incredible potential to transform the global juice industry,” notes Colm O’Gorman, Head of Sales Management for GEA’s Global Technology Center for Non-Alcoholic Beverages. “As consumer demand for lowered-sugar beverages continues to surge, we are eager to join Better Juice on this momentous journey. We look forward to delivering products that address one of the top consumer needs of reducing their sugar intake, especially in daily beverages.”
GEA Group AG, as key project partner, has provided innocent, one of Europe’s leading smoothie and juice brands, with the process technology for the world’s first carbon-neutral juice factory. The new factory in the Netherlands will lead the way for future plants in the food industry with a truly sustainable approach. Located at the Rotterdam Food Hub, the production facility is scheduled to open officially in spring 2022.
In the new-build project, GEA is responsible for the process, refrigeration and heating technology. Early involvement in the design planning phase enabled the company to develop numerous innovative process changes that significantly help innocent on the path to reaching its climate goals.
“The innocent project is an outstanding example of how we put our purpose of ‘engineering for a better world’ into practice,” said GEA CEO Stefan Klebert. “Not only have we integrated the most resource-efficient technologies, we have also entirely rethought the processes as well as the heating and refrigeration systems. Together with innocent, we have pushed the envelope beyond standard beverage production practice.”
Energy supply and demand cycle
Since much of the energy used in production is for heat, GEA worked intensively on in-process energy and resource efficiency. The company also applied the sustainable energy solutions (SEnS) approach. This factors heating and cooling requirements into the systems right at the planning stage, instead of after the fact when corrections are virtually no longer possible. For instance, a GEA heat pump will recover waste heat from the refrigeration systems and reuse it in other process steps. GEA and innocent recently won gold in the European Heat Pump Association (EHPA) People’s Choice Award for this smart heat pump design.
Showcase for the entire beverage industry
Taking a 360-degree view of the process chain will allow innocent to substantially cut its carbon footprint while massively influencing other parameters such as water consumption and waste generation.
“I take my hat off to GEA because they have been at our side every step of the way, helping us challenge conventional design approaches. All the little details add up to a great success,” said Andy Joynson, Chief Blender (Site Director) at the new innocent plant. The new solutions implemented go far beyond conventional beverage production processes. “Food and beverage manufacturers can choose to base their future plant designs on our model. We want to inspire and support a broad-based transformation. In line with that, we are consciously inviting the industry to share in our findings—and at the same time to learn from our missteps and our successes.”
GEA Group presented end of September ist „Mission 26“ strategy in London as part of its Capital Markets Day. The plan for the next five years defines seven key levers to accelerate sustainable, profitable growth. The focus is on sustainability, innovation and digital solutions, New Food, as well as excellence initiatives in sales, service and operations. The company is also looking at targeted acquisitions.
“We have set ourselves the goal of being at the forefront of the mechanical and plant engineering industry,” says Stefan Klebert, CEO GEA. “We take it upon ourselves to protect future generations by offering sustainable solutions for the food and pharmaceutical industries. In these attractive markets, we want to continue to grow profitably while contributing to a better world, as anchored in our purpose – engineering for a better world.”
Ambitious financial targets set for 2026
“Mission 26” sets ambitious financial targets for 2026. Organic sales growth of 4.0 to 6.0 percent per year is expected, leading to sales of around EUR 6 billion (FY 2020: EUR 4.635 billion). The EBITDA margin before restructuring expenses is projected to grow to a record level of more than 15 percent (FY 2020: 11.5 %). The Group-wide return on capital employed (ROCE) is anticipated to increase significantly to over 30 percent (FY 2020: 17.1 %).
In the context of further targets, a stable ratio of net working capital to sales of 8.0 to 10.0 percent is expected by 2026. Capital expenditure (CAPEX) is projected to be around EUR 200 million annually until 2026. Overall, this leads to strong free cash flow generation of around EUR 2 billion from 2022 until 2026.
“We are creating significant value for our shareholders through 2026 and beyond,” says Marcus Ketter, CFO. “Our shareholders will participate in this success with sustainable dividend increases.”
Holistic climate and sustainability approach
In June 2021, GEA presented its interim targets for reducing its own greenhouse gas emissions alongside its net zero ambition for 2040. Greenhouse gas emissions in Scopes 1 and 2 are to be reduced by 60 percent and in Scope 3 by 18 percent by 2030 (base year 2019). The Science Based Targets initiative (SBTi), the globally recognized independent body for reviewing climate targets, validated GEA’s CO2 reduction targets in September 2021. SBTi thus confirms that GEA’s interim targets follow the latest climate science and make an effective contribution to achieving the 1.5-degree Celsius target of the Paris Climate Agreement
In addition to the climate targets already communicated, GEA has set ambitious ESG targets. Combined, these measures focus on environmentally sustainable customer solutions and responsible operations. Furthermore, GEA aims to be the employer of choice in the industry.
“Sustainability is firmly anchored in the company’s DNA and is therefore also an essential part of Mission 26,” says Klebert. “With our ambitious approach, we help our customers achieve their own environmental goals. Likewise, we strive for the highest standards in our operations and support our employees in developing their skills. In this way, we live up to our social responsibility and ensure GEA’s lasting success.”
GEA drives product innovation with R&D and digitalization
“Innovation & Digitalization” are also expected to make a significant contribution to realizing the goals of “Mission 26”. Here, GEA aims to increase the proportion of sales of products that are less than five years old – from the current level of 10 percent to about 30 percent. To fuel this development, GEA will increase its research & development spending by approximately 45 percent over the next few years.
In addition to introducing new products, GEA will offer customers more digital solutions to further enhance their processes and GEA machine efficiency. To drive the digital customer journey and the development of digital solutions forward, these competencies haven been combined under the newly created position of Chief Digital Officer (CDO), effective August 1, 2021.
Growth market New Food: GEA with unique position
In the dynamically growing New Food market, GEA will expand its already strong position and become a market leader. Here, the company intends to leverage its strengths in scaling industrial applications and its unique position as a full-line supplier. GEA anticipates order intake for newly developed and existing machines from this segment to exceed EUR 400 million per year by 2026. “Consumer expectations around food are changing. For example, environmental impact and animal welfare are increasingly prioritized, and demand for high-quality, protein-rich foods is growing rapidly. GEA is optimally positioned to meet this demand,” explains Klebert.
GEA has already demonstrated its strength in this dynamic market by winning one of the largest orders in the company’s history: Novozymes, the world’s largest supplier of enzyme and microbial technologies in Denmark, is entrusting GEA with the turnkey fitting of a large-scale plant in the U.S. to produce plant-based proteins.
Excellence initiatives in sales, service and operations
Further growth opportunities for “Mission 26” lie in sales, service, purchasing and production. In GEA’s regions and countries, sales effectiveness and presence will be better exploited by deploying more of the company’s own sales staff in key markets. Sales of new machines are expected to grow by 4.0 to 5.0 percent per year until 2026.
Further growth potential was also identified in the service area, which is a resilient and profitable business for GEA. The aim is to increase coverage and expand the service business with customers by 2026, thereby boosting recurring revenue. This approach is expected to generate annual organic revenue growth of 5.0 to 6.0 percent in the service business until 2026.
The optimization measures announced at the 2019 Capital Markets Day impacting purchasing, production and logistics will be continued. In the process, purchasing activities were bundled in a central purchasing organization, the production network was improved, and greater flexibility was created at sites. The aim is to enable a transition to best-in-class procurement by 2026, further optimize the production network and reduce delivery times to customers.
“Global Operations is undergoing a comprehensive and long-term transformation process,” explains Johannes Giloth, COO GEA: “In addition to cost reductions, this also involves creating structures for further growth. In this way, Global Operations will continue to have a significant positive impact on profitability in the future.” Between 2022 and 2026, further optimizations in purchasing (EUR 90 million) and production (EUR 60 million) are expected to have a total net impact on EBITDA of EUR 150 million.
GEA examines possible acquisitions
Strong cash generation and a solid balance sheet will enable external growth. GEA will therefore examine value-enhancing acquisitions to strengthen its portfolio.
Outlook for business development in 2021 and 2022 confirmed
GEA confirms the guidance for fiscal year 2021 that was raised in July 2021. Organic growth of 5.0 to 7.0 percent is expected for revenue. EBITDA before restructuring expenses at constant exchange rates is anticipated to be in a range between EUR 600 million and EUR 630 million. The outlook for ROCE at constant exchange rates is likely to be in the range between 23 to 26 percent.
At the Capital Markets Day in September 2019, GEA communicated its targets up to 2022. In March 2021, when the annual figures for 2020 were presented, GEA adjusted its medium-term financial targets for 2022 upwards. GEA has confirmed these again. Group revenue is expected to grow by an average of 2.0 to 3.0 percent annually from 2019 until 2022, the EBITDA margin before restructuring expenses is to increase to a target corridor of 12.5 to 13.5 percent (Capital Markets Day 2019: 11.5 to 13.5 percent) and the ratio of net working capital to revenue is to be reduced to the range between 8.0 and 10.0 percent (Capital Markets Day 2019: 12.0 to 14.0 percent).
Novozymes, one of the world’s largest suppliers of enzyme and microbial technologies headquartered in Denmark, has entrusted GEA with the turnkey fitting of a major new plant to produce plant-based proteins for the plant-based food industry. The volume of this order is well into the high double-digit million-euro range.
GEA is further expanding its market position in the dynamically growing new food market with one of the biggest orders in the company’s history. Novozymes, the world’s largest supplier of enzyme and microbial technologies headquartered in Denmark, has entrusted GEA with the turnkey fitting of a major new plant to produce plant-based proteins for the plant-based food industry. The volume of this order is well into the high double-digit million-euro range. Building the new factory in Nebraska, USA, will start later this year and is expected to be completed towards the end of 2023.
“The demand for foods that have a demonstrably lower environmental footprint than conventionally produced products is growing enormously,” says GEA CEO Stefan Klebert. “With our technologies and experience in scaling industrial applications, GEA is ideally positioned to serve the new food market and thus contribute to our corporate purpose of ‘engineering for a better world’,” says Klebert. “We are pleased to partner with Novozymes in this strategic project.”
For decades, Novozymes has been developing fermented catalytic (i.e. industrially produced) proteins – enzymes – that are the basis for many industrial applications. Only recently, the company announced its intention to invest DKK 2 billion in the growth market for functional proteins (advanced protein solutions) for the food industry. “This investment in a new, state-of-the-art production line in Blair, Nebraska, underscores our commitment to feeding the world sustainably and demonstrating the true strength of biotechnology,” says COO & Executive Vice President Graziela Chaluppe dos Santos Malucelli, Novozymes.
The new plant covers the manufacturing steps from harvesting to separation of proteins. According to Heinz-Jürgen Kroner, Senior Vice President Liquid Technologies at GEA and responsible for the company’s alternative foods business, both partners are united by their ability to build scalable, reliable, and highly efficient plant systems. “This project is exceptional in many respects. The intensive bidding phase saw us planning the production lines for the ingredients less than a year later. We now aim to implement the project at the same pace. The partnership is a very rewarding experience.”
GEA will now construct the process systems, which include membrane filters, mixers, homogenizers, heat exchangers, pasteurizers and UHT units, cleaning and filling systems as well as the pump and valve technology. Installation will start mid-2022. The production capacity initially built can easily be expanded to multiply the capacity in the future as demand grows.
GEA Group AG announced a comprehensive climate strategy. With the corresponding climate targets, GEA is making a clear commitment to achieve net-zero greenhouse gas (GHG) emissions along its entire value chain by 2040. The company has submitted its net-zero commitment and 2030 interim targets to the Science Based Targets initiative (SBTi), the globally recognized, independent body for reviewing climate targets. Validation of GEA’s interim targets by SBTi is expected in the second half of 2021, confirming GEA’s targets are aligned with the latest climate science and are effectively contributing to the 1.5 degrees Celsius target of the Paris Agreement.
“GEA is taking bold action to support the global transition to a net-zero economy. Our new climate strategy positions GEA as the leader in our peer group. We are pursuing the most comprehensive and ambitious climate strategy in the mechanical engineering industry,” says Stefan Klebert, CEO GEA Group AG. “We are incorporating our entire value chain into this effort, tackling both direct and indirect emissions. And by doing so, we are taking clear action in line with GEA’s purpose: ‘engineering for a better world’.”
By investing globally in Gold Standard-certified projects to generate clean energy from wind, sun, biomass and waste gases, GEA’s own operations are already climate-neutral since the beginning of 2021. Established by the World Wide Fund for Nature (WWF), the Gold Standard certifies climate protection projects that have highest possible positive climate impact. “Carbon offsets for the emissions that we cannot yet avoid is, of course, only the first step on our net-zero journey. That is why we are working to transform our business operations to effectively contribute to limiting global warming,” explains Klebert.
2030 interim targets submitted
In addition to GEA’s 2040 net-zero target, the company has submitted ambitious interim science-based targets across all relevant scopes. Compared to the baseline year 2019, GEA aims to:
Reduce GHG emissions from its own operations (Scopes 1 and 2) by 60 percent by 2030
Reduce GHG emissions from the customer use phase of its products (Scope 3) by 18 percent by 2030
Immediate actions to reduce Scope 1 and 2 emissions
To reduce its Scope 1 and 2 emissions, GEA is pursuing multiple initiatives. First, the company aims to gradually increase its share of renewable power to 100 percent within the next five years. To achieve this, GEA will make use of renewable energy certificates, extend its own green power generation and look into long-term power purchase agreements. Second, GEA will boost the energy efficiency of its global infrastructure with initiatives to modernize office buildings and production facilities, prioritizing the 29 most energy-intensive production sites covering 80 percent of total group wide energy consumption.
Third, over time and where feasible, GEA will green its global fleet of approximately 4,300 company cars. A green mobility policy introduced today stipulates that all new incentive cars for GEA managers in Germany will be 100 percent electric. The company will invest in wall boxes at German GEA sites to support the rollout. “We want to lead by example,” remarks CEO Klebert. “Our transition to a zero-emission fleet – starting with the cars for our management in Germany – shows we are taking clear and visible action.”
Reduction in Scope 3 emissions essential to achieving net-zero target
GEA’s innovative technologies have long played a decisive role in reducing GHG emissions in the various end customer industries it serves, foremost food, beverage and pharma. With the ever-advancing resource efficiency of its production and process technology, GEA enables customers to reach their own sustainability goals. Nevertheless, in direct comparison to GEA’s own GHG emissions, indirect emissions from suppliers and products sold – so-called Scope 3 – make up more than 95 percent of GEA’s overall GHG emissions.
The company’s climate strategy therefore focuses on identifying climate impact hotspots in GEA’s product portfolio and further boosting the energy efficiency of GEA products. GEA’s comprehensive portfolio – ranging from components and industrial machinery to complete processing lines and factories – will be thoroughly analyzed in the coming years. This level of transparency will enable the company to prioritize the climate roadmap and further develop sustainable customer solutions.
“Product innovation will be the key lever to reach our 18 percent reduction target for Scope 3 in 2030. It’s an ambitious goal, but I’m convinced we’ll achieve it; engineering excellence is GEA’s core strength,” comments Klebert. “For instance, we are already equipping customers such as smoothie-producer innocent with machinery that enables the carbon-free production of beverages. Going forward, we will employ such climate-smart solutions on an ever-increasing scale.” In addition to installing new technologies, GEA modernizes existing customer plants to reduce their climate impact as much as possible.
Sustainability as key pillar in GEA’s Factory of the Future
Optimizing our manufacturing footprint, which includes reducing the environmental impact of our sites, is another important factor for achieving GEA’s climate and sustainability goals. GEA laid the cornerstone for a new, climate-neutral production facility in Koszalin, Poland, on May 21, 2021 – a concrete example of how GEA aims to decarbonize its infrastructure. The facility will produce its own energy by integrating photovoltaic panels on the roof and storing power in batteries which can be used to power fleet vehicles. In addition, a combined heat and power (CHP) system will be used to generate electricity and heat, which can be used to heat and cool the site. LED lighting, best-in-class building insulation and low emissivity glass are all part of the factory’s climate-neutral building concept.
Journey towards a comprehensive ESG strategy
GEA’s climate strategy is the first building block of a comprehensive Environment, Social and Governance (ESG) strategy at GEA. Beyond climate protection, this strategy will also take social and corporate governance aspects into account. It will reinforce the company’s commitment to United Nations Sustainable Development Goals (UN SDGs) and become a foundational element of ‘Mission 26’, GEA’s new corporate strategy that is currently under development. ‘Mission 26’ will be presented at GEA’s next Capital Markets Day in September 2021.
Process engineering group GEA and Israeli foodtech start-up Better Juice have joined forces to help beverage manufacturers produce healthier, lower-sugar fruit juice.
Better Juice has developed a groundbreaking solution that naturally reduces the amount of sugar in fresh juice by up to 80 percent, without affecting its nutritional value or taste. GEA is now engineering the process technology the start-up needs, setting this innovative solution on course for industrial production.
Demand for healthier juice
GEA frequently works with innovations partners such as start-ups in order to react more quickly to market trends and explore alternative solutions. Reducing the amount of sugar in our diets is one of the dominant themes in the food industry today, since people who consume excess sugar are more likely to be overweight, obese, or suffer from conditions like diabetes or cardiovascular disease. Although the COVID-19 pandemic has increased demand for orange juice as a vitamin-rich, immune-boosting drink*…
*Source: The Wall Street Journal (2020): “Grocery-Store Rush Spurs Big Gains in Sleepy Orange-Juice Futures”
At its meeting yesterday, the Supervisory Board of GEA Group Aktiengesellschaft extended the contract of CEO Stefan Klebert (55) by five years until December 31, 2026.
“Over the last two years, Stefan Klebert has led GEA back to a more successful path through targeted measures, highlighting the Group’s great potential for sustainable and profitable growth,” said Dr. Helmut Perlet, Chairman of the Supervisory Board of GEA Group AG. “The Supervisory Board therefore expresses its fullest confidence in him and is pleased to be able to continue our extremely successful cooperation.”
“I would like to thank the Supervisory Board for the trust they have placed in me,” commented Stefan Klebert, CEO of GEA Group AG. “GEA is a fantastic company with a compelling outlook for the future. I look forward to continuing to shape the company’s successful transformation.”
Shortly after Stefan Klebert took over as CEO in 2019, GEA initiated and consistently implemented several projects to improve efficiency. These initiatives, along with the short-term measures to manage the effects of the COVID-19 pandemic, have played a decisive role in ensuring that for the fiscal year 2020, GEA will again achieve significant gains in EBITDA before restructuring measures and the corresponding margin. In particular, the new organizational structure introduced in January 2020 has proven its worth by placing more revenue responsibility and decision-making power in the hands of local management.
Stefan Klebert became CEO in February 2019 and has been a member of the Executive Board since November 2018. On the Executive Board, he is responsible for all five divisions as well as the regions & country organizations. In this role, he also performs the function of Labor Director.
GEA Group AG decided on strategic guidelines and significant investments to further optimize its production network. In this context, production at the Bodenheim site near Mainz (GER) will be discontinued by the end of 2024. The plant in Koszalin, Poland, will be expanded into a Center of Competence for pump production and comprehensive machining. GEA will invest around EUR 30 million in this expansion. Investments and a further consolidation of production and process activities are planned at other locations, too. The aim is to further strengthen GEA’s global production network in order to increase productivity and reduce its cost base.
The agreed investments, as well as the guidelines of the underlying production strategy, are key pillars of GEA’s overall strategy. They are part of a series of measures the Group has decided on and implemented over the past 18 months: a new organizational structure, restructuring measures, and the new composition of the Executive Board. As part of the production strategy, production is supposed to become more international to increase customer proximity and leverage cost advantages. Additionally, it is planned to concentrate products and processes with synergy potential at certain locations and to increase capacity utilization. The aim is also to expand standardized production based on modular systems and to optimize the depth of value creation, partly through the reintegration of tasks that had previously been outsourced. The expansion of the Polish site in Koszalin is the first major investment within this production strategy. Since the adoption of the targets at the Capital Market Day 2019, GEA has already relocated around 40,000 production hours from Chateau-Thierry in France to Tianjin in China. The transfer of a further 120,000 production hours within China by consolidating the Shanghai plant with Suzhou will be completed by the end of this year. The current productivity initiative and associated investments in digitalization and automation are expected to increase productivity and reduce overall costs.
Stefan Klebert, CEO of GEA Group AG, commented, “Optimizing our global production footprint is an important step to increase our profitability in the long term. We are building on previously implemented improvement measures that already had a positive effect on our financials in previous quarters. Going forward, we will concentrate certain standardized products and processes at individual sites. At the same time, we stay true to our basic principle of producing “local for local” to best meet customer-specific requirements. This partial centralization allows us to better balance our production concept between customer proximity, efficiency, and proven site-specific expertise.”
In addition to the strategic guidelines, the site consolidation measures are initially aimed at reducing costs and leveraging economies of scale in production. As part of the new production strategy, around 150,000 production hours are to be transferred from Germany to GEA’s Polish site in Koszalin between 2022 and 2024. In this context, the Koszalin site will be significantly expanded. Among other things, around 90,000 production hours, which are currently performed by external providers, will gradually be implemented in Koszalin from 2021. The relocation of production hours to Poland is expected to lead to a reduction of around 160 jobs in Germany by the end of 2024. Around 60 of these are planned to be reduced through natural fluctuation and partial retirement solutions. As part of this site consolidation, it is intended to close down pump production at the Bodenheim site near Mainz with its around 90 production employees by the end of 2024. The remaining functions located there, such as R&D, are not affected. GEA aims to reduce its workforce without any compulsory redundancies.
In line with the production strategy, Koszalin will be expanded into a Center of Competence for pump production and comprehensive machining. The latter is an important step in the production process of numerous GEA end products. For this purpose, GEA plans to invest around EUR 30 million in the expansion of this site over the coming years. In addition to Koszalin, the new production strategy defines eight further Centers of Competence. Of GEA’s 26 German sites, four – Berlin, Bönen, Büchen, and Oelde – will also be extended to Centers of Competence, along with the Italian factories in Parma, Colognola and Manfredonia as well as the plant in Tianjin, China. Investments for expanding these sites as part of the production strategy are planned, too. GEA intends to add additional Centers of Competence in the future. All investments will take place within the scope of the existing financial planning framework and will neither impact the outlook for 2020 nor GEA’s medium-term targets.
Johannes Giloth, Chief Operating Officer of GEA Group AG and also responsible for production, commented: “This production strategy contains crucial measures to further optimize our production network. By expanding our site in Koszalin, we will more than quadruple the number of employees there, from currently around 60 to approximately 250. The production area will increase fivefold. However, we are not exclusively relying on relocation. We continue to invest Group-wide and will look at each individual plant to see how we can improve productivity. Further digitalization and automation of our production – two important drivers for more efficiency – will play a key role in this process.”
With the outbreak of Covid-19, organizations are faced with travel restrictions and quarantine challenges, required to reduce direct contact between employees and service providers. To enable immediate GEA expert assistance for customers during the corona crisis without putting people’s lives at risk, GEA now offers a special remote support solution that is easy-to-set-up.
Easy and secure real-time video communication with GEA experts
GEA Remote Support is a service that provides real-time streaming with GEA experts. From their own location in production, customers can use a commercially available mobile device to connect and communicate in real-time with a GEA expert to resolve their issue. With just two elements, a mobile device and internet access, customers can initiate a session by receiving a short email or SMS containing a secure link, followed by a video conversation, with the option to share high-resolution imagery back and forth, send descriptions and instructions via the chat function or take and share notes during the conversation. All of this is possible without the customer having to install a new application.
Extended real-time communication via GEA Remote Eye Wear
The remote support solution is based on existing GEA Remote Eye Wear technology, offering customers further possibilities for machine maintenance. The specially designed glasses, which include an integrated high-resolution camera and reliable microphone, allows for hands-free remote support, offering several bidirectional functions. By projecting images onto the GEA Remote Eye Wear screen, repairs, process optimizations or inspections can be carried out immediately. GEA Remote Eye Wear is currently available as part of the GEA Service Level Agreement (SLA), however, customers will be able to purchase a stand-alone unit as part of a premium service package in the near future.
A tough market, according to GEA experts Martin Zickler and Dave Medlar, where it is better to start planning from the back in order to make everything right from the beginning. That’s why they first built up the service network and a local assembly and then made a promise: GEA pumps will bring a new level of quality, efficiency and hygiene to the US dairy, pharmaceutical, food and beverage markets.
GEA acquired Hilge, a leading German pump manufacturer, in June 2015. Since then the company has been integrated into GEA and has benefitted from its engineering experience and global network of customers, suppliers and agents. Now that the pumps have received 3-A certification, the time is right to meet the US market head on.
Martin Zickler is the product manager for hygienic pumps, based in Germany. He worked with Hilge before the GEA acquisition. “The old company had no footprint in the USA,” he said. “But now that we have the backing of GEA and a comprehensive service and distribution network in the country, we are ready to take on the challenge.”
Michael Brandt is the business development manager charged with the job of making the US launch a success. He said that he had never had any doubts about the quality of the pumps and the opportunities for them in the US, but he had to make sure that the service and support structure was up to American standards before introducing them to the market.
Get ahead by looking back
“GEA pumps are strong, reliable workhorses but, for the American market, service is critical,” he explained. “We need to be able to respond quickly to our customers and provide a fast spares service. We also needed a reliable distribution network as customers need to know that if they require assistance, they can get the relevant expertise quickly.”
Dave Medlar, head of sales valves & pumps USA and his team have been working hard to get the support network in place before the product launch. “Of course, providing excellent service is always work in progress but I am now confident that we are ready,” he said. “We have a global reputation to maintain; when people buy a GEA product, they know it’s going to be supported well, also during the entire service life of a pump.”
Hygienic approach becomes a must-have
The GEA centrifugal pumps have a unique impeller design that sets them apart from normal centrifugal pumps. “We have pushed the impeller towards the front making it more efficient and the mechanical seal easier to cool. It mimics a closed impeller but can still be used in the pharmaceutical industry and wherever sanitary conditions are required,” said Martin. “This means the pump is easier to clean and can handle a much wider range of liquids.”
In addition, GEA pump housings are manufactured by deep drawing, not casting. This provides a much higher quality surface finish without blow holes in which bacteria can collect. Although this has been a feature demanded largely by the pharmaceutical industry in the past, the food and beverage market is increasingly requiring a more hygienic approach throughout all aspects of its production.
Engineering excellence that allows customization
Although the product’s unique features are impressive, and it has a great reputation for reliability, Michael sees an even stronger sales proposition in the engineering experience of the GEA group. “It’s like an engineer’s toolbox,” he said. “We know that all applications are different and it’s flexibility that our customers need. Because we are engineers, not just suppliers of components, we can adapt the pumps to fit virtually any application. This might include, for example, different fittings or mountings, a more robust design or even providing the pump on a trolley. We look at the application, then work out what the customer needs are.”
The Supervisory Board of GEA Group Aktiengesellschaft and Steffen Bersch (50), member of GEA’s Executive Board, have mutually agreed to prematurely terminate his service agreement due to expire on December 31, 2021. In doing so, the Board honored Steffen Bersch’s request for a termination of his service agreement to seek new challenges outside of GEA Group.
As a consequence, GEA will shrink its Executive Board to three members. As of March 1, 2020, the latter will comprise the Chairman of the Executive Board Stefan Klebert, the Chief Financial Officer Marcus A. Ketter as well as the company’s Chief Operating Officer Johannes Giloth.
Since January 1, 2016, Steffen Bersch has been a member of the Executive Board of GEA Group Aktiengesellschaft, where he has been responsible for the Liquid & Powder Technologies, Food & Healthcare Technologies and Refrigeration Technologies Divisions as well as Global Technology since the start of the year.
Joining GEA back in 2000, Steffen Bersch has held various leadership positions within the company. This included several years as Managing Director of GEA Middle East in Dubai, United Arab Emirates, as well as a stint as head of a business unit in the Separator business. On the Executive Board, he was in charge of the Business Area Equipment until the end of 2019. When the new divisional organization entered into force at the start of the year, he took up his current responsibilities.
For the purpose of giving the Division CEOs and the Regional CEOs responsible for operational business a greater say in corporate decision-making, the company will set up a Global Executive Committee immediately below Executive Board level.
GEA presented a new modular orbital cleaner at BrauBeviale 2019 in Nuremberg. Compared to conventional orbital cleaners, the OC200 offers distinctive advantages in terms of cleaning performance and efficiency, build quality and lifetime. The modular concept allows the optimisation of the cleaning process, resulting in significant cost savings. The orbital cleaner’s normal operating pressures are 4 to 10 bar and can easily deliver high impact liquids for tanks with a diameter of up to 35 metres. The OC200 is particularly suitable for large process tanks and storage vessels for industries including food, beverage and wine.
Ground breaking design is a recipe for success
Effective, efficient and repeatable cleaning processes are essential in today’s modern hygienic manufacturing industries. The team at GEA has now developed a ground breaking modular cleaning solution for large vessels and particularly demanding cleaning applications. The new GEA Orbital Cleaner OC200 can be individually configured and easily adapted to the cleaning tasks at hand, ensuring optimization of the cleaning process whilst protecting valuable resources. The modular system allows interchangeability of key components – rotors, nozzle carriers and nozzles – in various standard options whilst the main cleaner assembly simply remains in place. This modularity offers flexible adjustments of impact values, cleaning diameter, dwell time and insertion size, as well as reduced consumption of cleaning media, according to the application requirements and customers’ priorities.
Powerful and flexible cleaner type
The new GEA Orbital Cleaner OC200 is the largest and most powerful cleaner in the GEA range. With nozzle sizes up to 15mm, it combines extended cleaning distances through the use of the latest nozzle and flow guide combinations, ensuring high impact performance standards. If the process parameters change, the cleaner can simply be adapted to the new requirements through the interchangeability of key components. Optimizing the cleaning performance helps to prevent product contamination and increase product safety, thereby protecting the product and brand.
Significant cost savings due to optimized cleaning
The GEA Orbital Cleaner OC200 saves time and valuable resources (chemicals, water, labor costs) thanks to the unit’s ability to be totally adjustable to the cleaning process. Once the cleaner has been installed, the process engineer is able to fine tune the “clean in place” process to obtain maximum efficiency, keeping the “total cost of ownership” and cost per clean optimized.
At the forefront when it comes to service and build quality
The superior design and build quality ensures repeatable performance, combined with extended service intervals, ensuring longer plant production. When service is required, the unit’s relatively small number of internal components, together with the availability of standard service kits through the extensive GEA network, allow a swift cost effective return to full operation.
At its AUSPACK conference on March 27, 2019, the Australian Packaging and Processing Machinery Association (APPMA) selected the best packaging innovations and products of the year. GEA VIPOLL received the Award of Excellence for its ALL IN ONE monoblock filler in two categories: GEA’s Australian partner Foodmach had submitted the filler for the competition and received the “Best New Product Award” and the “Best Imported Equipment Award” for the ALL ON ONE which fills cans, glass and PET bottles.
A joint presence in the Australian market
The multifunctional system provides an unprecedented level of flexibility to beverage manufacturers with medium capacities: It can be used to fill glass, cans and PET containers, handle a wide range of formats and seal them with diverse cap types, fill carbonated or still drinks, in cold and hot processes. Partner Foodmach develops and produces secondary packaging equipment and automation systems for food, beverage and industrial companies, and, together with GEA VIPOLL, provides innovative filling technology in Australia. In 2018, the company integrated the ALL IN ONE for the first time into a line for Lion’s Malt Shovel Craft Brewery. As one of Australia’s largest food and beverage companies, Lion markets numerous premium brands in the dairy, alcoholic and non-alcoholic beverage categories.
A flexible and sustainable filling solution
In Melbourne, Australia, the ALL IN ONE won over the APPMA by demonstrating its ability to produce big results in small spaces, and to save time during filling and format changeovers. “We are naturally very pleased with this success in Australia, which honors both the good cooperation with Foodmach and Lion and our development work”, says Jakob Šalamun from GEA VIPOLL. “The ALL IN ONE provides a solution to the massive challenge that beverage manufacturers are currently facing. The desire for efficiency and flexibility is clearly a key driver of innovation. Our customers, for example Lion, want to conserve resources and take environmental responsibility for their packaging processes.”
1893 – It was the year of inventions that are still indispensable today, such as the diesel engine by Rudolf Diesel and the zipper by Whitcomb Judson. And 1893 also showed what persistence means. Andy Bowen and Jacke Burke fought a seven-hour, 19-minute boxing match over 110 rounds – with no winners in the end. At the same time, the businessman Franz Ramesohl and the cabinetmaker Franz Schmidt in Oelde, Westphalia, proved their innovative strength, creativity and stamina. They opened a workshop on September 1, 1893, and produced a hand-operated milk centrifuge with the model name “Westfalia”. Ramesohl & Schmidt oHG had three locksmiths and two turners 125 years ago. They produced the hand-operated milk centrifuges with the simplest but effective equipment. Entrepreneurial skills, craftsmanship and technical expertise coupled with a love for innovation formed the basis for the following 125 years.
The roots of the company developed into today’s GEA site, the most modern separator plant in the world. The products “made in Oelde” are supplied all over the world. The export quota is currently over 80 percent. GEA’s expertise now encompasses over 3,500 different processes and 2,500 products for various industries ranging from food and beverage, marine, oil and gas to power, chemical, pharmaceutical and environmental technology.
Regionally rooted, globally active
Today, Oelde is GEA’s largest single site worldwide with a production area of around 37,000 square meters. Around 1,900 employees, 180 of whom are trainees, are currently working in the areas of design, production and administration. GEA invested heavily in the site in 2013. “We had and still have the clear ambition not simply to swim in the global competition, but to determine it by increasing efficiency,” says Steffen Bersch, member of the GEA Executive Board, who worked for many years in Oelde himself. For example, the new building in Oelde, which was built in 2013, was essentially based on the idea of sustainability: its own combined heat and power plant with an electrical output of 1.2 MW reduces the CO2 footprint and generates enough electricity to supply more than 2,000 average households. The new separator production enables GEA to optimize processes throughout the entire production process. The use of well-trained and committed employees in conjunction with modern production machines and technologies has led to significantly reduced throughput times in the production of the separators and plants, most of which are customized to the customer’s needs, while maintaining above-average product quality.
The company’s own Process Test Center (PTC), which opened in 2014 and provides extensive specialist support for customers’ investment projects, also enables even greater customer orientation: Starting with the specification of product properties through the determination and design of machine types to pilot tests at GEA and on site at the customer’s premises. In cooperation with the customer, GEA Product Managers and GEA Process Development, the PTC also develops and tests completely new processes. The PTC also underscores GEA’s innovative strength as a leading international technology group. More than 11,000 tests and process developments as well as more than 18,000 laboratory product analyses have been carried out to date. This know-how is bundled in a database, which is supplemented and updated every year by around 500 new product tests and over 150 process developments.
In order to reliably ensure maximum customer satisfaction and continuous machine availability during operation, the supply of spare parts is coordinated centrally from Oelde and in cooperation with renowned logistics companies via so-called hubs. These spare parts centers are currently located in Cologne, Germany (since 2011), Singapore (since 2014) and Naperville, USA (since 2017). At the European Parts Logistics Center (EPLC) in Cologne, around 21,000 different articles – from 5 mm diameter sealing rings to machine parts weighing several hundred kilograms – can be retrieved in the shortest possible time; on average, 250 shipments are handled daily. GEA customers can call this service 24/7 via a hotline. If an order is received by 3 p.m. local time, it is guaranteed to be ready for dispatch on the same day. Particularly urgent shipments even leave the site within an hour.
Exploiting the opportunities offered by digitization
The continuously and ever faster progressing digitization changes customers, markets and last but not least GEA. Finding the right answers with innovative digital products and services is crucial for tomorrow’s competitive advantage,” explains Brinke. GEA sees digitization above all as an opportunity and a pioneer for new growth and development potential, both in the new machine sector and with regard to the growing range of service solutions.
A current example from the service sector: GEA PerformancePlus includes service packages that go far beyond traditional maintenance and are an ideal complement to an industry 4.0 strategy. This uncovers optimization potentials that enable sustainable plant operation. Modern technologies for condition monitoring combined with the know-how of GEA employees provide the customer with meaningful condition analyses and information for decision-making with regard to possible process optimizations – with the aim of permanent availability and maximum productivity. At the same time, changed production requirements can be better assessed and orders can be scheduled in an economically optimal manner.
Strengthened by 125 years of success, GEA Separation continues to follow in the footsteps of digital transformation – and so this anniversary not only marks a milestone in the company’s history. At the same time, it is an incentive to push ahead with innovations and continue to improve customer processes and, not least, people’s lives in the long term – in other words, “engineering for a better world”.