Charting a growth course
GÜTERSLOH. Establishment of new production and service locations in Russia, Estonia and Asia
- Successful customer acquisition in all business divisions
- Start of new service offers such as telephone information service 1 18 18 and In2Movies
- Comprehensive publishing program for the FIFA World Cup 2006
Arvato, the internationally networked media and communication services provider of Bertelsmann AG, has charted a clear growth course for 2006. "Our focus in the current fiscal year is on continuity, and we will continue to forge ahead with our proven three-dimensional growth strategy in 2006," Hartmut Ostrowski (48), Arvato's chief executive officer and a member of the board of management of Bertelsmann AG, said in Gütersloh today. The executive projects further growth impulses from the acquisitions and joint ventures concluded in 2005, which will unleash their full sales and earnings potential during the current fiscal year, as well as from the realization of various future-oriented projects that Arvato's business divisions have launched during the past few months. Ostrowski cited several projects for the three growth dimensions as proof that Arvato has its sights firmly set on continued growth in the current fiscal year.
Arvato has already initiated three projects this year with the aim of entering new markets. For example, the group of companies became the first western replicator to open a new CD and DVD plant in Russia this March. At the new location in Jaroslawl, a city with 600,000 residents located 250 kilometers north of Moscow, the company will produce storage media for the Russian market on behalf of its international customers. "Russia has evolved into an attractive business location with strong growth rates. In addition, many existing and potential customers expressed great interest in the establishment of a licensed western replicator on the Russian market. We hope to exploit the resulting opportunities with our new production location," the executive noted in describing the good prospects of the new location.
The services division also headed eastward and rigorously continued the expansion of its international network with the opening of a new service center in Tallinn, Estonia. "This new business foundation marks another milestone on Arvato services' inroads into the major growth markets of eastern Europe."
Another important market of the future is Asia where Arvato systems is already very active. After expanding the Business Application division in China last year, further locations have been added in Malaysia and Thailand.
All in all, Arvato and its subsidiaries now cover 37 countries.
To achieve organic growth, it is important not only to strengthen and expand existing customer relationships, but also to continuously attract new customers. Arvato also enjoyed a number of successes in this area during the first quarter of 2006. For example, two major projects got off to a successful start at Mohn media in Gütersloh at the beginning of the year: catalogue production for Office Depot and the production of yellow pages for PagesJaunes. Mohn media prints the Viking Office Products catalogues for Germany and four other western European countries on behalf of Office Depot, the world's biggest office retail mail-order firm. In addition, the company produces yellow pages in multi-million print-runs for the PagesJaunes group. After Arvato systems was able to win over two major North American TV broadcasters to its S4M Broadcast Management Solution last year, another continent was tapped at the beginning of this year: New Zealand's TVNZ will also be marketing its advertising time and much more with the help of the software provided by S4M, the Cologne-based subsidiary of Arvato systems.
The Arvato logistics services division also reported new customer additions. Sales efforts proved particularly successful in the area of health-care logistics. The division, which was successfully internationalized with the takeover of the BG Group in 2005, attracted the venerable B. Braun company and Chiron, a U.S. producer of biopharmaceuticals, as new customers.
Arvato made important strides in the expansion of its portfolio of services. In the storage media division, for example, Sonopress in the United States is one of the first storage media producers worldwide to have started production of Blu-Ray discs and HD DVDs, two DVD successor media. "By setting up the first production line in Weaverville, we are once again pioneering progress in the sector and are proving that we consistently offer our customers state-of-the-art technology," Ostrowski said.
Another services package that is entering the market after 12 months of intensive preparations is the download platform GNAB. Media trader JPC has been offering its customers music downloads based on the GNAB technology via the Internet platform www.jpc.de/mediacenter since the beginning of this week. In a few days, Arvato mobile and Warner Bros. Home Entertainment will launch their joint venture, In2Movies. In2Movies is an innovative download platform for the electronic retailing of movies and TV content in Germany, Austria and the German-speaking part of Switzerland that is based on the GNAB technology and will be launched in the next few days. "In2Movies allows users to download movies and TV series at guaranteed top speed, effectiveness and quality based on our protected technology," Ostrowski said. With this partnership Arvato is entering the movie download market.
Another successful service launch at the beginning of this year was the Germany-wide telephone information service 1 18 18. "Thanks to our qualified personnel and the existing structures, we have managed to establish 1 18 18 as a fast and competent telephone information service on the market," Ostrowski said.
Since last summer's acquisition of Teleservice, the division repair and after-sales services for mobile communication providers has also firmly established itself in the market. The division was expanded further during the past few months. Since the start of this year, Arvato services has been carrying out so-called "level 3 repairs," or particularly demanding repair services, for cell-phone maker in the Czech Republic.
Special topic FIFA World Cup 2006
The international media group Bertelsmann is the exclusive licensee of world soccer association FIFA for the official print publications related to the FIFA World Cup 2006™ in the German-speaking area. For the first time, several Bertelsmann companies have acquired a comprehensive license covering the broad range of printed products. Spearheaded by Arvato subsidiary medienfabrik Gütersloh, the companies Wissen Media Verlag, Wissen.de, C. Bertelsmann Kinder- und Jugendbuchverlag (CBJ), Mohn media Kalender & Promotion Service GmbH and Sony BMG Deutschland are planning numerous magazines, specialized books, event-related reference works, jigsaw puzzles, children's books, calendars, posters and audio books for sale before and during the FIFA World Cup 2006™. All in all, the World Cup team of Bertelsmann AG will publish about 120 official licensed products. More than 60 products have already been brought to market. "We're already looking forward to providing World Cup visitors with books, calendars, posters, magazines and much more," Ostrowski said. "That's our understanding of the official World Cup motto, 'A time to make friends.'" The publishing program for the FIFA World Cup 2006 is by far the biggest that has been launched for such an event to date.
"Despite the economically uncertain times, Arvato had a good start in the current fiscal year. I am certain that we will also reach our growth targets in 2006: with new customers, in new markets and with new products and services."
With more than 260 subsidiaries worldwide, Arvato is one of the biggest internationally networked media and communication service providers. In fiscal 2005, the group of companies that is part of Bertelsmann AG generated sales of € 4.37 bn. Arvato's worldwide subsidiaries currently employ more than 42,000 people. Arvato comprises the Arvato print companies (e.g. Mohn media and numerous printers in Europe and America), the divisions Arvato direct services (e.g. customer loyalty systems and service center services), Arvato logistics services (logistics/supply chain management), Arvato storage media (e.g. production of CD-ROMs, DVDs and audio CDs) and Arvato systems (international provider of qualified and customized IT services) as well as empolis, a leading provider of company-wide content and knowledge management solutions, and the mobile entertainment provider Arvato mobile with its handy.de and TJ.net brands.
Further information on Arvato is available on the Internet at www.arvato.de.
Picture: Board members of the Arvato (f.l.t.r.): Hans-Joachim Herzog (Arvato logistics services), Günter Wilmsmeier (CFO), Hartmut Ostrowski (CEO), Markus Dohle (Arvato print Deutschland), Hans-Peter Hülskötter (Arvato storage media), Rolf Buch (Arvato direct services).
Arvato Public Relations
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