Fresenius Kabi

Fresenius Kabi optimized the purchasing conditions by setting the following focuses in 2010. Firstly, we continued implementing measures to realize the cost-cutting potentials identified in 2009 in the Global Sourcing Initiative project, as described in the previous year. Secondly, we have successively integrated acquired companies into the purchasing organization and the global sourcing activities.

In 2010, the development of raw material prices was affected by various global factors. The prices of the raw materials relevant for Fresenius Kabi rose considerably in some cases. This was due to a general recovery of demand at the macroeconomic level, especially in China and India. At the same time, world trade was affected by the volatility of major trading currencies. Some prices came close to their 2008 peak levels.

  • Owing to the trend in the underlying commodity prices, the prices of plastic granulate (such as low-density polyethylene (LDPE), polypropylene, and PVC for primary packaging and medical devices) picked up markedly, with the result that the cost of the foil for primary and secondary packaging and the hosing for medical devices produced from it also increased.
  • This applies to cardboard packaging as well, with the prices of the majority of the paper grades used rising appreciably.
  • The prices for glass bottles decreased in 2010 due to lower energy costs, among other factors.
  • In the case of products based on agricultural raw materials, the situation for Fresenius Kabi was mixed. The prices of processed milk products were higher on average in 2010. Although corn prices climbed steeply in the second half of 2010, compared to 2009 the cost of corn-based products was favorable thanks to the timely conclusion of supply contracts.

For our IV drugs we use a wide range of active substances whose pricing is largely independent of that of the underlying raw materials. They have a market dynamic of their own. This is due to their complex manufacturing processes and pharmaceutical standards as well as patents and product availability. Important criteria for our sourcing activities are high product quality and flexible availability as required at competitive prices. In 2010, we were able to conclude a number of attractive supply agreements at fixed prices for one or more years.

As expected, the cost of electricity and natural gas decreased in 2010. We were able to reduce our costs substantially in the 2010 supply year (October 31, 2009 to October 31, 2010), especially for natural gas.

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