Despite all the hostility towards diesel, plastic tanks for selective catalytic reduction (SCR) are driving sales of the automotive segment at Röchling (Mannheim / Germany; www.roechling.de) significantly. Hanns-Peter Knaebel reported this at his first financial results press conference as the new head of the company. Investments amounting to around EUR 180m last year – more than half of it in the automotive division – is the new measure of all things, and promises further growth. The company posted sales of EUR 1.84 bn in 2017 and the aim is to raise this to EUR 2.5 bn by 2020. Röchling also just recently acquired the US medical technology supplier Precision Medical Products (PMP, Denver, Pennsylvania), adding it to its growing Medical division.

It is not immediately obvious that Knaebel comes from the medical sector and is a qualified surgeon – apart from the amusing statement he made that "it's always good to have a doctor in the house." He has certainly done his homework and, with the support of board colleague Steffen Rowold, does not flounder when the discussion centres on details about car production, PA 6.6 or new mobility applications. He attributes last year's "gilt-edged balance sheet" to his predecessor, Ludger Bartels.

For Röchling, the sales of EUR 1.84 bn represent a growth rate of 11% over the previous year. EBIT rose by EUR 9.1m, while the margin declined slightly to 7.3%. Earnings were similar to those of 2016. Röchling traditionally does not go into detail about earnings. The first four months of 2018 were below expectations, showing sales were up 5.9%, but the company anticipates a strong second half-year and is aiming for full-year sales of EUR 2.1 bn.

So far, the shortage of skilled staff has not slowed down the group's growth, but a great deal of work is needed to make sure this does not happen, said Rowold. Nowadays, Knaebel said, it is no longer a case of the future employee applying for a job at the company, but, conversely, the company approaching the employee.

Automotive is still the company's largest division with sales of EUR 991.5m, and, with growth of nearly 16%, it is also the fastest growing division – despite all efforts to balance this out. About half this growth is attributable to the SCR systems. "Although there are fewer diesel vehicles," said Knaebel, "those that are being built are now all given these systems."

Europe is the driving force in the automotive division with an increase of nearly 24%. The weakness on the US market, reflected in the decrease of 5% because of the country's orientation to SUVs and small trucks – an area in which Röchling has so far played only a minor role – has not significantly slowed things down. The aim is to balance this out again during the course of 2018. Apart from that, initial trials are underway with the integrated sandwich floor developed in the last few years, and research is also being carried out on plastic and plastic-overmoulded metal parts for use in e-vehicle batteries and fuel cells.

As expected, the second-largest division, Industrial, grew unspectacularly by 7.7% to EUR 737.4m. The division recorded the strongest growth in Asia and the lowest growth in Europe with just under 6%.

Despite the expansion in the medical technology segment, which Röchling has been pushing for several years now, Medical is still a long way from reaching the size of its two sister divisions. Only recently, Röchling put its hand in its pocket again and acquired the US company PMP. It is specialised in injectors, and is expected this year to contribute EUR 35m of sales. CFO Rowold said sales in 2017 were EUR 114.4m, after EUR 117.2m in the previous year.

The reason for the decline is a fall in US turnover by 14.5%, caused by a relocation of certain sections of US production to a new plant at its site in Suzhou, Jiangsu / China. There, plastic parts are to be manufactured for minimally invasive surgery for two US groups and, for the first time, for two Chinese customers.

The second reason for Medical's poor result is somewhat delicate, because it was apparently avoidable. In 2017, Röchling Oertl Kunststofftechnik (Brensbach / Germany), which was acquired in 2008, sent an old contract back to a large customer because it considered it unprofitable despite subsequent negotiations.

In 2018, the division will shed more feathers despite the PMP acquisition, with sales expected to fall to around EUR 100m (figures without PMP) before returning in 2019 to the level of 2017, and from then continuing to grow. This is down to internal restructuring, especially in Brensbach, where, despite investment in cleanroom production, job cuts are planned.