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OPINION


floating assets, and short-term liabilities is fading. Only 44 per cent of the respondents continue to focus on reducing the costs of production; over half (55 per cent) of building technology managers, who have also set the most ambitious profit targets, will pursue this strategy in 2011.


Forward-looking profit investments The managers are in agreement about where their profits will be invested: R&D, capacities, international expansion, and employee training. The main beneficiary of profits varies by industry. Base material companies (over 80 per cent) plan on investing in capacities, while chemical firms will focus their extra earnings on both capacities and R&D (about 60 per cent each). Building technology companies (about 65 per cent) will concentrate primarily on R&D. A common position was taken by all


respondents: these measures will take priority over profit distribution, debt reductions or increasing equity. The managers will invest their profits in forward-looking measures that will boost performance. Short-term withdrawals play a rather


insignificant role. Sebastian Strasmann says: “Those who start paying off their debts instead of investing won’t achieve very much.”


Investing in performance Strasmann views the study findings as a very positive signal for developments in 2011. The strategies and measures for this year are long-term. Short-term ad hoc optimizations are becoming more seldom. All signs point toward sustainable growth. Strasmann adds, “Companies that invested in new products and services two or three years ago, despite the crisis, can already reap the benefits. This will also contribute to their bottom-line growth.”


Still, Strasmann predicts that managers will


face a particular challenge in implementing their planned price hikes and in increasing and improving sales activities. His colleague Karl- Heinz Sebastian also cautions: “The economic crisis has been overcome in the minds of most managers. This is evident in their long-term plans for sustainable profits. Nevertheless, they shouldn’t be blinded by their optimism – the risks of rising and volatile raw material costs cannot be ignored.” Companies must prepare and consistently


implement sufficient price increases to compensate for climbing costs. To achieve their ambitious profit targets, the managers must focus not only on tapping potential in sales efficiency, but also on the hidden risks of rising and volatile raw material costs. ❒


Simon-Kucher & Partners is based in Bonn, Germany. www.simon-kucher.com


US demand for chemical sensors is projected to exceed $6billion in 2014


U


S demand for chemical sensors is projected to grow 8.9 per cent per year


to $6.1 billion in 2014. Biosensors will continue to be the largest type of chemical sensor, as the increasing number of diagnosed diabetics boosts demand for glucose test strips. Overall growth will be supported by recovery in automobile manufacturing and process industries; by technological advances that allow for price reduction and greater precision, which will expand the use of chemical sensors into new markets; and by new applications


within existing markets. Demand for chemical sensors based on emerging technologies, such as optical sensors, will see fast gains. Although the largest end use will remain the medical market, growth will be strong in all chemical sensor outlets, which also include industrial and environmental monitoring applications. These and other trends are presented in Chemical Sensors, a new study from The Freedonia Group, Inc, a Cleveland, US-based industry market research firm. Through 2014, electrochemical sensors are expected to see the


Table: US Chemical Sensor Demand (million dollars)


Per centage annual growth


Item


Chemical Sensor Demand Biosensors


Electrochemical Sensors Optical Sensors Other


2004


2903 1855 825 120 103


2009


3990 2950 730 165 145


2014 2004-09 2009-14


6115 4410 1210 260 235


Source: The Freedonia Group, Inc. Chemical Sensors (published 01/2011, 326 pages) is available for $4,800 from The Freedonia Group. www.freedoniagroup.com


6.6 9.7 -2.4 6.6 7.1


8.9 8.4 10.6 9.5 10.1


fastest growth, with demand reflecting recovery in manufacturing - particularly new motor vehicle production - following the significant downturn beginning in late 2007. Optical sensors, including products based on infrared, fibre optic, photoionisation, fluorescence, chemiluminescence, light-emitting diode, laser and ultraviolet technologies, will also see substantial gains. Optical sensors will continue to benefit from their high sensitivity, stability, immunity to interference, and product improvements such as smaller size and enhanced ruggedness. Biosensors are expected to provide good opportunities as well. Sales will be boosted by the increasing prevalence of diabetes in the population and by growing demand for home and point-of-care testing and monitoring tools. The large automotive sensor market will post growth due to a rebound in motor vehicle production.


Fierce competition among suppliers will put downward pressure on prices as manufacturers strive to capture or maintain market share. ❒


ECE 4


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