Glass Industry News

New strategy: SCHOTT sets the course for the future

, Schott AG
  • Opening up new business fields 
  • Special focus on China and the USA 
  • Climate neutral by 2030 
  • Driving transformation in terms of digitalization and diversity

SCHOTT has set itself ambitious goals with its new Group Strategy. The internationally active Group is an expert on the development and manufacturing of specialty glass, a material with which nearly everyone comes into contact on a daily basis and that offers virtually infinite application potential for a wide variety of markets.

“It is our clear goal to leverage this potential,” said Chairman of the Board of Management Dr. Frank Heinricht at the presentation of the new SCHOTT Strategy in Mainz. “We will concentrate on four fields of action: We intend to enter into neighboring business fields and significantly expand our involvement in our two focus markets, the USA and China. At the same time, we will focus on the current challenges of climate protection, diversity and digitalization and want to actively convert these into an advantage for us.”

Review 2014-2020: Successful portfolio consolidation

SCHOTT has set the course for these efforts within the framework of its previous strategy. Dr. Heinricht emphasized the good development over the past six years. “We have achieved the goal of setting a clear course for profitability with our strategy program initiated in 2014 much faster than we had planned.” For example, the equity ratio has been increased to currently 32% in recent years. Operating profit has risen steadily since 2014, most recently to EUR 275 million.

“This shows that our approach of initially streamlining the portfolio at that time was the right move,” Heinricht added. At the same time, the Group has laid the foundations for further growth alongside its successful consolidation. During the aforementioned period, SCHOTT invested over 1 billion euros worldwide and expanded its innovation pipeline even further. This preparatory work is particularly effective in the current economically fragile situation: Thanks to its broad portfolio, the company has good stability despite COVID-19. As in the past, SCHOTT will announce further details and its results for fiscal year 2020 at its Annual Results Press Conference in January.

“We have established a good foundation over the past few years. Now is the time to take our ambitions to a new level,” Dr. Heinricht explained. “This project is ambitious, but that has always been SCHOTT’s strength.” It is for this very reason that the company culture and the guiding principle of “Pioneering Responsibly Together” are fixed components of the new strategy. Based on this, the company has defined four projects across all units by 2026:

1. Focus on new business fields

SCHOTT has set itself the goal of increasingly developing adjacent markets and applications. Successful examples include the augmented reality or ultra-thin glass business: glass types that have already been developed are being used for new applications such as foldable smartphone displays or data glasses. Another goal is to expand the range of products by adding new products and thus make a strong impression in markets the Group is already active in. For example, the company has made use of its expertise in the pharmaceutical market and successfully opened up a new product segment with its polymer syringes. The company is already expanding this expertise by expanding the capacity of its site in St. Gallen (Switzerland) and by building a new plant in Müllheim (Germany).

2. Focus on China and the USA

The expansion of business in the USA and China represents an important focus of the new strategy. As the world’s largest economies and centers of innovation with an international scope, both regions hold great potential for a wide range of specialty glass applications. SCHOTT expects positive impulses from these two regions for pharmaceutical packaging, semiconductors & data communication as well as in medical technology and consumer electronics, among other fields. Expanding regional research and production activities in cross-functional and transnational teams should significantly advance growth in these dynamic markets. SCHOTT has set an initial milestone for this goal with the start of production at the new Chinese pharmaceutical tubing plant at the beginning of 2021.

3. Climate neutral by 2030

At the same time, SCHOTT is focusing on sustainable development in pursuing its growth targets and therefore intends to become even more involved in climate protection than before. “We want to make SCHOTT a climate neutral company by 2030 and thus make an active contribution to climate protection,” Dr. Heinricht explained. No other company in the specialty glass industry has ever set itself such an ambitious goal and firmly anchored it in its strategy.

The Group is seeking to avoid, reduce or compensate for climate-damaging emissions and is focusing on four fields of action: Further savings potential will be identified within its proven energy management system. SCHOTT will be switching completely to green electricity for its electrical power. Over the long term, the company wants to completely dispense with the use of fossil fuels, as far as this is technologically feasible. The company sees a promising approach to solving this problem in hydrogen technology, for example. SCHOTT wants to compensate for technologically unavoidable emissions by investing in climate protection projects. Find more information about SCHOTT's climate neutrality strategy here.

4. Driving forward transformation in terms of digitalization and diversity

People determine the success of any company. “Organizations are demonstrably more successful when they live diversity in their culture and rely on diverse teams,” said Dr. Heinricht. As a traditional industrial Group, SCHOTT’s first priority is to attend to the basics. The goal is to send a “Best Team” to the starting line for each task that combines the right professional skills with a culture of acceptance and openness. Target images and roadmaps are currently being developed in consultation with the Business Units. In addition, the HR department is developing a process to ensure greater diversity in new hires and succession planning. SCHOTT wants to take into account all dimensions of diversity, such as different values and perspectives, and place an emphasis on nationality, gender and interdisciplinary professional experience.

In order for the “Best Teams” to reach top form, the right conditions need to be in place. In the area of digital transformation, SCHOTT therefore wants to gain speed, impact and reach and thus play a leading role in the specialty glass industry. The development and manufacturing of specialty glass is a complex process for which digitalization definitely offers potential for optimization. Manufacturing processes at SCHOTT have been optimized for quite some time now using Industry 4.0 approaches and Artificial Intelligence. “We want to provide SCHOTT employees with even better support when it comes to their daily work and raise awareness within the Group of the opportunities that digitalization offers,” Heinricht explained.  The goal is to make glass production more efficient, to learn even more about glass and to enable further product innovations and business models.

Translating the spirit of the founding fathers into the future

“More than 130 years ago, our company founders made it their mission to improve life, promote the sciences and spur progress in many areas with innovative specialty glass. As pioneers, they developed this company with curiosity, focus and a clear vision. Exactly the same spirit serves as a model for our new strategy. In the coming years, we will consistently take the necessary steps to achieve this,” concluded Chairman of the Board of Management Dr. Heinricht.

, © Schott AG

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