- Middle East Business Grows 20%, Despite COVID Pandemic.
Hansgrohe Group, manufacturer of high quality sanitaryware, headquartered in the Black-Forest town of Schiltach, Germany, with Middle East operations run from Dubai, has reported its most successful financial year in the company’s 120-year history. The company, which manufactures quality faucets, showers and shower systems generated sales of €1.365 billion, which represents a growth of 27 percent compared to the previous year (€1.074 billion). The operating profit increased to €249.7 million, also an increase of 27 percent compared to the previous year (€197.0 million). In the Middle East region, sales were buoyed up by demand from a flourishing luxury real estate and hospitality sector, growing by 20% over the year’s period, despite the challenges brought about by the COVID pandemic.
“We would especially like to thank all Hansgrohe employees, as these extraordinary results wouldn’t have been possible without them,” says Hans Juergen Kalmbach, Chairman of the Hansgrohe Executive Board. “Extraordinarily high demand and developments in the raw material markets proved to be quite challenging, but our employees managed to deliverer a top performance, in spite of the added ongoing pandemic situation, allowing us to supply and serve our customers with the Hansgrohe service they’ve come to expect.”
Global Growth
The Hansgrohe Group generated around 74 percent of its sales abroad in 2021, which was a single percentage point higher than in the previous year. The global company delivers its faucets and showers to 152 countries.. Growth in international business was nearly 30 percent higher than in the previous year, due in large part to development in sales in the Chinese and US American markets. Added to this are sales from the majority shareholding in the Dutch company Easy Sanitary Solutions (ESS) acquired at the end of 2020.
Due to a variety of strategic initiatives and enormous growth in sales, the number of people employed by Hansgrohe increased drastically. The company employed 5,373 employees (2020: 4,714) worldwide in the 2021 financial year. In the Middle East, the Riyadh and Dubai operations are set to welcome new team members, and the Egypt and Pakistan outlets are also undergoing expansion plans.
Hansgrohe continues to invest in safe and modern workplaces at all locations – both in production and administration. Having learned from the pandemic, the company now relies more heavily on individual work time models. In areas where it’s practical, fixed requirements and rigid rules about who can work in the office or remotely, and when, were eliminated in the summer of 2021. Each team decides together on how best to structure internal processes and availability for the benefit of customers and other employees.
Investments in Growth, Innovation, Digitalization, and Sustainability
Despite current political and economic uncertainties, the Hansgrohe Group is sticking to its planned investment in a new location in Serbia. For up to €85 million, the faucet and shower manufacturer plans to build a manufacturing plant in the city of Valjevo. Faucet production by the end of 2023 is expected. “With this investment, we’re reinforcing our production network in Europe,” says Hans Juergen Kalmbach, Chairman of the Hansgrohe SE Executive Board. “It’s part of our global production strategy to keep supply chains and transport routes short and secure.”
At the same time, the company is also investing in its existing German locations. The Schiltach manufacturing plant is being modernized with a price tag of €12 million and, beginning in mid-2022, will operate as a production facility for the design brand AXOR. The Alpirsbach location is also being renovated and will begin operating as an innovation park in summer 2022.
The Hansgrohe Group invested a total of €51.3 million (2020: €46.8 million) in 2021. In addition to investing in modernizing various locations, funds were also dedicated to production – particularly mechanical processing, plastic injection molding, and assembly. There were also key investment projects for advancing digitalization in production, logistics, and administration.
Digital communication is also a must when it comes to marketing new products and has become extremely important for addressing trade customers. Because the most important industry trade fairs were canceled due to the pandemic, the Hansgrohe Group presented its innovations for bathrooms and kitchens virtually at the “Hansgrohe AquaDays” in March 2021. New products, such as the hansgrohe Vivenis faucet program and the AXOR One collection, were the highlights at this digital event, which Hansgrohe regularly complements with online trainings and e-learning courses for trade partners.
The innovative strength of Hansgrohe is regularly confirmed by third parties. The company has been named one of the Top 100 Innovators of German SMEs for the fifth time in a row and the AXOR and hansgrohe brands won numerous design awards in 2021, including German Design Awards in Gold, iF Gold or red dot Winner Awards. Since 1974, Hansgrohe has been making a name for itself with its design expertise; to date the number of design awards has grown to over 700.
In 2021, the manufacturer of high-quality faucets, showers, and shower systems also continued to invest in its sustainability. All German sites are climate neutral in terms of direct emissions and energy consumption. By the end of 2022, all international sites will follow.
2022 Prospects
The past two years were largely shaped by the pandemic and its effects. “Even in 2022, the pandemic will continue to influence our daily lives,” says CEO Hans Juergen Kalmbach. “We’ll also continue to face global supply and material shortages and increasing energy prices. So far, we’ve managed to ensure the supply of our plants without holding up production. In fact, we’ve set some ambitious goals in terms of sales growth and increased efficiency again for 2022.”
Regarding the Middle East region’s growth, Andreas Wolf, Managing Director of Hansgrohe, SE Middle East adds: “ Our unique offering of quality manufacture with high innovation and a keen focus on sustainability , along with the company’s investment in areas such as digitization and environmental safe-guarding, continues to position Hansgrohe as a preferred partner amongst trade customers, architects, specifiers and designers in the region. We are grateful for their support and diligence in securing and maintaining business during a challenging period, and look forward to continuing our growth trajectory for the remainder of 2022.”
