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Siemens separates off mechanical drives business

17 February, 2017

Siemens is setting up its Mechanical Drives (MD) business as a separate company, in a move that could lead to its eventual sell-off. Siemens says that the new setup that will enable the business to operate more efficiently and flexibly in implementing its growth plans in a competitive environment.

Mechanical Drives, which belongs to Siemens' Process Industries and Drives Division, and employs around 6,000 people worldwide, includes the Flender and Winergy brands which Siemens acquired for €1.2bn in 2005.

Siemens says that MD’s market, which is dominated by medium-sized companies, is currently characterised by weak growth, increasing competition from Asia, and overcapacities, resulting in high price pressures. It adds that managing MD as a separate company under the Siemens umbrella, will give it more room to manoeuvre as well as “intensifying its business-specific orientation”.

In the past, Siemens has separated off businesses – such as its Osram lighting activity and its Infineon semiconductor operation – before selling them.

Siemens says it plans to invest in Mechanical Drives’ locations worldwide and in its product portfolio to ensure its continued market and technology leadership.

The Mechanical Drives division's portfolio includes Flender gearboxes

MS supplies components for mechanical drives systems, with a portfolio that includes gearboxes, couplings and related services. The operation is particularly strong in applications with high torque requirements.

“In the last two years, the business has considerably improved its competitiveness,” reports Jürgen Brandes, CEO of Siemens' Process Industries and Drives Division. “We've focused MD on its core business and, among other things, created a separate sales organisation that has considerably improved customer proximity.

“Setting up a separate unit is the next step toward achieving long-term success,” he adds.

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