PROCUREMENT
An efficient management of the value chain is important for Group profitability. Global procurement management, which assures the availability of goods and services as well as the consistent quality of the materials used in production, is a key element. In an environment characterized by ongoing cost containment pressure from health insurers as well as price pressure, security of supply and quality play a crucial role. For this reason we are constantly striving to optimize our procurement processes, to tap new procurement sources, and to achieve the best possible pricing structures while remaining flexible and maintaining our strict quality and safety standards.
Within the Fresenius Group global procurement is coordinated centrally, enabling us to bundle similar requirements and negotiate global framework agreements. These central coordinating offices organize purchases for the production sites and arrange comprehensive quality and safety checks of purchased materials and goods. Current market and price developments are analyzed on an ongoing basis. In 2008, the cost of raw materials and supplies and purchased components and services was € 4,204 million (2007: € 3,769 million).
| in million € | 2008 | 2007 |
| Cost of raw materials and supplies | 3,668 | 3,266 |
|
Cost of purchased components and services |
536 | 503 |
| Total | 4,204 | 3,769 |
Fresenius Medical Care
Fresenius Medical Care countered the increased purchasing prices in 2008 by bundling requirements, with a great many raw and other input materials being standardized across regions. We also stepped up our sourcing in regions with for us favorable currency exchange rates. In North America, the financial and economic crisis led in part to significantly higher price demands from suppliers. We are seeking additional suppliers to fuel competition for our procurement volumes. In 2008, we further optimized our procurement processes in the United States in order to achieve cost reductions. Outside the United States, in the International segment, the “Purchasing Excellence” initiative was continued. The aim of this initiative is in Europe to centralize the sourcing processes more strongly and rationalize them in order to save costs. For items purchased in very large quantities such as polysulphone, the material from which the fibers used in our dialyzers are made, we searched intensively for second suppliers in 2008 so as to additionally secure our supplies.
Fresenius Kabi
Fresenius Kabi’s purchasing power was further strengthened by the acquisitions in 2008. The supplier portfolio was also optimized, and product specifications were increasingly standardized. In addition, long-range sourcing strategies have been devised that improve Fresenius Kabi’s purchasing position in relevant markets.
To counter increases in raw materials and energy prices, Fresenius Kabi began extending the global bundling of requirements early on, also acting in coordination with other Fresenius companies. A focus in 2008 was on synergy projects, e. g. for dextrose derived from corn and for process filters used in the production of infusion solutions. Fresenius Kabi uses processed products derived from raw materials of agricultural origin – both milk and corn – in its infusion therapies and enteral nutrition. The price of corn, which is used as a basic raw material for various processed products, rose strongly at times in the course of 2008. Following large price increases for processed milk products, supply grew in 2008. As a result of this development, Fresenius Kabi was able to enhance its negotiating results. A bidding process was developed together with Fresenius Medical Care for joint requirements in the area of solution filters. This will take effect in 2009.
