Merck Aims for Leadership in Science and Technology
The company, which posted sales of €17.5 billion in fiscal 2020, is expecting group sales to grow organically by more than 6% per year on average up to 2025. About 80% of sales growth will come from the Big 3 businesses, namely the Process Solutions business within the Life Science sector, new products in Healthcare and the Semiconductor Solutions business within Electronics.
Between 2021 and 2025, the Darmstadt-based group plans to increase its total capital investment by more than 50% compared with the period 2016 to 2020. More than 70% of its spending will be in the Big 3. “We will allocate our capital in a very targeted and disciplined manner, regardless of whether for fixed assets, acquisitions or research and development. This is crucial in order to further accelerate the growth of Merck,” said Belén Garijo, chair of the executive board and CEO.
As of end 2022, Merck is anticipating having available a euro sum in the high single-digit billions for acquisitions. The company said it still considers targeted smaller to medium-sized acquisitions as more likely than major transformational deals.
Outlining plans for Process Solutions, Merck said it will expand manufacturing capacities and its production network to drive growth in its bioprocessing business. It also proposes to provide contract manufacturing and development services for therapies “in a targeted manner”, both for established and new applications. In addition, Life Science will sharpen its focus on the Asia-Pacific region, especially China.
New products are predicted to contribute about 75% of Healthcare’s growth to 2025, with Merck targeting the specific areas of oncology, neurology and immunology.
For Electronics, Merck is investing in digital business models and data analysis competencies, as well as expanding production capacities in close proximity to customers, particularly those in Germany, the US, Korea, Taiwan and China. In addition, this business will continue to evaluate potential targeted, bolt-on acquisitions.
Author: Elaine Burridge, Freelance Journalist