Germany leads pack in booming machinery sector

Production of food processing machinery and packaging grew by 4% in 2015, according to data from the VDMA Meat Processing Machinery Technology Group.

This is particularly good news for the sector, considering that the overall machinery manufacturing industry ended 2015 in a year of stagnation.

Germany’s food packaging machinery industry is the fourth-largest of 34 specialist verticals of the renowned German engineering industry, and exports accounted for around 86% of the €13.5bn turnover.

Growth driver​

With a market share of 28%, Germany is the world’s leader in exports of meat processing machinery, according to 2014 data from the VDMA.

The Netherlands (23%) is second, the USA and Italy (7%) are joint-third, Austria enjoys 5%, with the remaining 30% derived from elsewhere.

With strong overseas and domestic demand, meat processing machinery was worth around €1bn in 2015.

Russia woe​

“Meat processing machinery is one of the growth drivers of the food machinery industry, and the demand continues to be strong,​” said Klaus Schroter, chairman of the VDMA, at the IFFA​ press conference on Thursday 4 February in Frankfurt.

“Global consumption of meat is growing, the range of products in the convenience area is increasing, and the amount of the actual processing of meat – and thus the added value – is also rising.​

“We must, however, concentrate even more on volatile markets. Political and economic crises hit us much harder than the usual cyclical fluctuations at the moment – and this is particularly true for business with Russia,​” added Schroter.

German exports of meat processing equipment to Russia have plummeted by nearly 50% since 2014. Exports fell by 15% this year and the drop was preceded by a near-third decline in trade in 2014.

However, the fall is less a result of the ongoing political situation in Russia and more to do with the fluctuations in both the euro and the weakening rouble, which delayed a number of lucrative investment projects.

But with Russia’s growing need to modernise its arsenal of meat processing machines, Schroter said he expected the investment backlog to resume within the next two years.

If good news can be derived from the damaging impact of Russia’s stand-off with the EU, it must surely be this: meat machinery exports were offset by booming trade to other markets, rising by 10% altogether.

“For our industry, the European Union is the most stable market sales region. North America has remained a reliable sales region throughout the years and Asia and Latin America are becoming increasingly important,​” added Schroter.