Wienerberger Baustoffindustrie AgEssay Preview: Wienerberger Baustoffindustrie AgReport this essayCASE SUMMARYCompany OverviewFounded in 1819 in Vienna and traded since 1869 on the Vienna Stock Exchange, Wienerberger can look back on a great tradition. Only in 1986 the company started its dynamic expansion, which has focused on building materials since the introduction of Value Management in 1997. This transformed Wienerberger from a local Austrian brick-maker into the worlds largest producer of bricks within a few years.
Wienerberger encompasses 3 divisions, namely bricks, pipes, and real estate. It operates more than 70 companies and has about 220 plants in some 25 countries. Products include wall systems (hollow and facing brick), concrete surface paving bricks, and roofing systems (clay and concrete tiles). Other Wienerberger operations include its Pipelife plastic pipe business. The companys extensive real estate portfolio (which it is divesting) includes development, landfill, and garage investments.
Wienerberger is the worlds largest producer of bricks (as of March 2001) and Number 2 on the roofing market in Europe, and also holds leading positions with pavers in Europe.
Hallow bricksNo. 1 worldwideFacing bricksNo. 1 in Continental EuropeNo. 2 in the USARoofing systemsNo. 2 in Central-Eastern EuropeClay pipeNo.1 in EuropePlastic pipeNo. 4 in EuropeMarket AnalysisHome Country (Austria)Austria is a highly developed country, located in the centre of Europe.PositiveThe opening of Eastern Europe created the opportunity for relocation of the production units to take advantage of very low cost and the development of new markets, bur resulted in new competition in some sectors.
Became an EU members in 1995, resulted the country be a favorable location for foreign firms and attractive markets.A tough currency policyPrivatize the large state-owned sector, which resulted in further structural markets distortionsNegativeHigh unemployment rateReducing public investmentIndustrySales in brick industry depend onThe general level of economic activityThe business of construction and construction-materials industriesThe development of private residential constructionHome MarketHome market is very smallMarket potential in home market relates only to the adoption/renovation and modernization sectors, rather than new (private or public) building.Private sector elasticity demand is much lower than in the public sector.Major EU markets and EU Leading SupplierGenerally, the building industry in the EU has been a stable sector for many decadesWestern Europe Ðo the real growth rate is expected to remain below 2%Eastern EuropeBuilding industry has increased its volumeVery low and unstable growth due to varies considerably between the countriessuper-normal growth of market shares explained by rapid demand growth and acquisitionsLabor productivity increased by 33%, while unit labor cost (+15.8%) and total cost (+17.4%) rose considerably lessTrade and Nature of competitionTrade in the brick industry has been minimal as it mainly a local businessMarket structure in the brick industry is OLIGOPOLY, in which tends to reduce competition between few suppliers, became dominant position of large supplier in home market
Competition depend on the share of bricks of total construction materials used, including substitutes such as concreteHighly developed countries и highly concentrated in order to stand the pressure of substitutesLess developed countries и the role of substitutes is considerable less significantMain SuppliersWestern Europe markets concentration rate very high, i.e. UK seems to dominate the brick markets, but very competitive marketSouthern Europe the market is characterized by a large number of small suppliers, and a concentration and industrialization process has not yet set-inThe larger global competitors are Australian Boral Group, which is the market leader in Australia, US and Asia.Key Success FactorsMix of firm size and financial structure.The larger the firm, the higher the return on technology, since brick production sites are similar everywhere и ensures efficient supply on the firm level
Laggy Bottom line:There are three main factors that are important to make the impact.The first is cost, which is very volatile. The risk is not eliminated in bricks, the risk is reduced. Secondly is the strength of the infrastructure itself, which can be determined by a combination of factors, such as technology, labour and labour markets, such as those for steel and concrete.Thirdly we have to recognise the complexity and the need for good infrastructure in a country with such a small number of firm sizes and the time and resource constraints. Our team has to design the infrastructure that allows us to do that.Finally we have to understand a bit about the economy. The big business in Australia is about 30% to 40% of a global company. And it can take some time before we get to the 40% to 50% of the global company. At all time levels it will take one and a half to two years to build a factory, but with the time and cost of these types of things, most companies can make a profit.We can be confident that the majority of these projects are sustainable if a company is focused on its technology and production processes. This is good for the Australian population and it is a good reason to believe they will be able to provide much richer, more modern products when demand develops.This study does not provide any analysis of other countries or other sectors of the economy, although it offers a couple of clues. In China there is a constant push towards greater industrialisation and a decline in the concentration of technology and capital in China compared to our home country. But there are few industrial hubs in those countries where this trend is not occurring.The analysis shows that the share of total development is still large. It is about 20-25%. We use the figure of 24% for the country in which we operate, but it is also quite impressive. We are also looking at other sectors that can be part of the equation. Australia and China are the two best places in the world for the sector of the economy that is largely developing, but it takes a major leap to go from that growth to an industrial base. So the share of total development we see is a good indicator that a country is developing at a high level. I think Australia is the world leader in the use of its manufacturing capacity and it has developed to the point where Australia has been at the top of the list because of the good quality of our labour base. But if we look at more closely it is the second largest sector – the construction industries are in China and the manufacturing hubs in Australia are almost all overseas. In Australia the main reason for this is the fact that there is large demand in those countries, but we tend to focus on those. The construction industry is still a very small part of the economy here in Australia – the number of construction jobs is about 3%. But the manufacturing hubs are not as strong as the manufacturing capacity in the general population – it is much bigger. We have only four of the top 50 or so construction industries in Australia in some proportion of their total workforce. The reason for this is that I think building is the big factor in our job creation and also that, for a nation like the USA, being in the construction industries can do huge work. You need infrastructure here to make sure that these new facilities are being built well, and that there are other reasons for us to invest in it. It is almost always cheaper to build on some country’s land than to use a lot of energy. The reason we build on it is because we have a long way to go to get all this technology and build all of these new buildings.This is a very real challenge for
Laggy Bottom line:There are three main factors that are important to make the impact.The first is cost, which is very volatile. The risk is not eliminated in bricks, the risk is reduced. Secondly is the strength of the infrastructure itself, which can be determined by a combination of factors, such as technology, labour and labour markets, such as those for steel and concrete.Thirdly we have to recognise the complexity and the need for good infrastructure in a country with such a small number of firm sizes and the time and resource constraints. Our team has to design the infrastructure that allows us to do that.Finally we have to understand a bit about the economy. The big business in Australia is about 30% to 40% of a global company. And it can take some time before we get to the 40% to 50% of the global company. At all time levels it will take one and a half to two years to build a factory, but with the time and cost of these types of things, most companies can make a profit.We can be confident that the majority of these projects are sustainable if a company is focused on its technology and production processes. This is good for the Australian population and it is a good reason to believe they will be able to provide much richer, more modern products when demand develops.This study does not provide any analysis of other countries or other sectors of the economy, although it offers a couple of clues. In China there is a constant push towards greater industrialisation and a decline in the concentration of technology and capital in China compared to our home country. But there are few industrial hubs in those countries where this trend is not occurring.The analysis shows that the share of total development is still large. It is about 20-25%. We use the figure of 24% for the country in which we operate, but it is also quite impressive. We are also looking at other sectors that can be part of the equation. Australia and China are the two best places in the world for the sector of the economy that is largely developing, but it takes a major leap to go from that growth to an industrial base. So the share of total development we see is a good indicator that a country is developing at a high level. I think Australia is the world leader in the use of its manufacturing capacity and it has developed to the point where Australia has been at the top of the list because of the good quality of our labour base. But if we look at more closely it is the second largest sector – the construction industries are in China and the manufacturing hubs in Australia are almost all overseas. In Australia the main reason for this is the fact that there is large demand in those countries, but we tend to focus on those. The construction industry is still a very small part of the economy here in Australia – the number of construction jobs is about 3%. But the manufacturing hubs are not as strong as the manufacturing capacity in the general population – it is much bigger. We have only four of the top 50 or so construction industries in Australia in some proportion of their total workforce. The reason for this is that I think building is the big factor in our job creation and also that, for a nation like the USA, being in the construction industries can do huge work. You need infrastructure here to make sure that these new facilities are being built well, and that there are other reasons for us to invest in it. It is almost always cheaper to build on some country’s land than to use a lot of energy. The reason we build on it is because we have a long way to go to get all this technology and build all of these new buildings.This is a very real challenge for
Laggy Bottom line:There are three main factors that are important to make the impact.The first is cost, which is very volatile. The risk is not eliminated in bricks, the risk is reduced. Secondly is the strength of the infrastructure itself, which can be determined by a combination of factors, such as technology, labour and labour markets, such as those for steel and concrete.Thirdly we have to recognise the complexity and the need for good infrastructure in a country with such a small number of firm sizes and the time and resource constraints. Our team has to design the infrastructure that allows us to do that.Finally we have to understand a bit about the economy. The big business in Australia is about 30% to 40% of a global company. And it can take some time before we get to the 40% to 50% of the global company. At all time levels it will take one and a half to two years to build a factory, but with the time and cost of these types of things, most companies can make a profit.We can be confident that the majority of these projects are sustainable if a company is focused on its technology and production processes. This is good for the Australian population and it is a good reason to believe they will be able to provide much richer, more modern products when demand develops.This study does not provide any analysis of other countries or other sectors of the economy, although it offers a couple of clues. In China there is a constant push towards greater industrialisation and a decline in the concentration of technology and capital in China compared to our home country. But there are few industrial hubs in those countries where this trend is not occurring.The analysis shows that the share of total development is still large. It is about 20-25%. We use the figure of 24% for the country in which we operate, but it is also quite impressive. We are also looking at other sectors that can be part of the equation. Australia and China are the two best places in the world for the sector of the economy that is largely developing, but it takes a major leap to go from that growth to an industrial base. So the share of total development we see is a good indicator that a country is developing at a high level. I think Australia is the world leader in the use of its manufacturing capacity and it has developed to the point where Australia has been at the top of the list because of the good quality of our labour base. But if we look at more closely it is the second largest sector – the construction industries are in China and the manufacturing hubs in Australia are almost all overseas. In Australia the main reason for this is the fact that there is large demand in those countries, but we tend to focus on those. The construction industry is still a very small part of the economy here in Australia – the number of construction jobs is about 3%. But the manufacturing hubs are not as strong as the manufacturing capacity in the general population – it is much bigger. We have only four of the top 50 or so construction industries in Australia in some proportion of their total workforce. The reason for this is that I think building is the big factor in our job creation and also that, for a nation like the USA, being in the construction industries can do huge work. You need infrastructure here to make sure that these new facilities are being built well, and that there are other reasons for us to invest in it. It is almost always cheaper to build on some country’s land than to use a lot of energy. The reason we build on it is because we have a long way to go to get all this technology and build all of these new buildings.This is a very real challenge for
Strong financial, easier play a role in “M&A- game” in the industry (high cash flow) и secure market shareFIRM ANALYSISDivisions and ProductBricks are to a certain extent a price-sensitive product, in which results in a quality premium of only approximately 5% of the ordinary pricingProductsHome Market“Wall, ceiling and roofing system”Remain at 40%, remain not growth and no attempt to increase market shareHollow BrickDominant positionTechnology