Germany’s Schott Will Soon Earn More in China Than at Home, Execs Say
Peng Haibin
DATE:  Nov 02 2023
/ SOURCE:  Yicai
Germany’s Schott Will Soon Earn More in China Than at Home, Execs Say Germany’s Schott Will Soon Earn More in China Than at Home, Execs Say

(Yicai) Nov. 2 -- Schott Group's revenue in China will surpass that in Germany in the next few years, and that in its biggest market, the US, in the longer run, as the German specialty glass manufacturer goes from strength to strength in China’s huge market, company executives said.

China is one of Schott's two strategic markets, and we value the opportunities for business development and innovation, Salvatore Ruggiero, vice president of marketing and communication, and Chen Wei, general manager of Schott China, recently told Yicai.

Schott, which logged global sales of EUR2.8 billion (USD3 billion) in the last fiscal year, has continued to grow in China since 2018 despite the Covid-19 pandemic, largely because China has a wide range of industries that use Schott's products.

Most of Schott’s business in China is pharma packaging. Consumer electronics are also an important sector. China ranks first in the world in mobile phone production, while the US is in second place and Germany in third.

However, competition in China's specialty glass market is far more intense than that in Germany, the US or any other country as glass makers from all over the world, such as Japan’s Asahi Glass, and the US’ American Corning, are attracted to its huge market, Chen said. Schott faces rivals in almost every application field.

Mobile phones, for example, use different types of glass according to their function and price range. China is home to manufacturers of a huge range of handsets, from high-end iPhones costing over CNY10,000 (USD1,367) to Xiaomi’s budget Redmi series costing just CNY1,000 yuan. Schott holds a bigger share of the high-end market, thanks to its foldable glass technology, while Chinese specialty glass makers occupy most of the low- to mid-range phone market.

Future Investment

Glass making is an energy-intensive business. High electricity prices since the Russia-Ukraine conflict have made it too expensive for Schott to invest in projects in Germany and so the Mainz-based firm is turning to invest in other countries, Ruggiero said.

Schott has invested EUR170 million (USD180.2 million) in China over the past five years to expand production, research and development. The group does not get involved in trade frictions between countries and the EU's new anti-subsidy probe is not affecting Schott’s investment in China, he added.

But the biggest factor affecting its future investment in China is sluggish consumer demand, Chen said. Most of our markets are pegged to people’s needs, and existing production capacity is enough to meet demand. This means that Schott may become more cautious about investing in future, he added.

Editor: Kim Taylor

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Keywords:   SCHOTT,Germany,China