Dr. Karl-Ludwig Kley: Active in the entire world, at home in Darmstadt

Despite all prophecies of doom, Ger­many is an internationally significant location in the research and development of new medications. In recent years, German research-based pharma­ceutical com­­pa­­nies have been expending continuously increasing contributions in this field, to more than five billion euros annually. This amounts to about 14 million euros spent daily for the development of new medi­cations. This demonstrates that Ger­many continues to be an important location for internationally operating pharmaceu­­tical com­­panies. For the German natio­nal economy, with a net added value of over 100,000 euros per employee – more than almost any other industry – this sector has an important significance. Research-based pharmaceutical compa­nies have proven time and again through high investments and the creation of new jobs that they rely on Germany.
In a globalised world, in which loca­­tions are in competition with each other, this is only possible when innovation-friendly and reliable conditions are met. There is definitely no lack of challenges for this industry in Germany and also internationally: more and more complex health reforms, that are im­­plemented at ever shorter intervals, the competition due to generic drugs, increasing pricing pressure, or the trend for more stringent statutory requirements for safety and proven benefits of new medications. For a re­­source-poor country such as Germany re­­search is of crucial significance to remain com­­petitive internationally, and therefore, secure prosperity.

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Merck, with headquarters in Darm­stadt, is a German company driven by the spirit of research and an in­­quiring mind, the joy of innovation and creativity, while never abandoning its cor­­porate culture and values. In ad­­di­tion to the production of various medications and chemicals, numerous depart­­ments call this location their home; their employees support­ing companies around the globe and pro­­viding services locally. Sev­eral sub­­sidiary com­­panies are also based here: Merck Serono GmbH, Merck Con­su­mer Health Care Holding GmbH, Merck Selbstmedikation GmbH and Merck Shared Services Europe GmbH. In 2010, Merck posted total revenues of about 9.3 billion euros; the operating result was 1.1 billion euros. A total of about 40,000 people work for the Merck Group in 67 countries. In Darmstadt, there are approximate­ly 8,900 em­­ploy­­ees and more than 450 apprentices.
In Merck’s nearly 350-year history, the company has always maintained the balance between the tried and tested and the new, between tradition, progress and new thinking. “Sustain – Change – Grow” is therefore the motto of the company, which today, as a publicly listed company on the stock ex­­change and a global operation, does business in markets around the world.

The Merck corporate culture is grounded in values which are obligatory for all employees at all times: courage, achieve­­ment, responsibility, respect, integrity and trans­­parency are the compass by which the economic and social actions of the man­­agement and employees are determined.

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With operations in chemical, pharma­ceu­­tical and life sciences, the Darmstadt-based company has not only profound expertise but also a high potential for syn­­ergies. These business areas have many similarities and cross-fertilize each other. Merck operates with phar­ma­­ceu­tical and chemical products on regu­lated markets, which distinguish them­­selves through high specialisation and innovation propensity. With the acquisi­tion of the US life-science company Milli­pore in 2010, further synergy effects were added, such as the new methodology for the targeted use of biopharmaceuticals or the search for new ways for biotechnological produc­tion. Further­more, due to the takeover, Merck has become a world leader in the life-science industry. The portfolio spans a total of more than 40,000 products and processes – from laboratory chem­­icals to complete solutions for the pro­­duction of biopharmaceutical medications. Broadly speak­­ing: solutions are offered to the individ­ual client, and high-tech products in the material field are provided for industrial customers.

In many areas Merck operates as a lead­­er. Here are two examples of this from the chemical industry: liquid crys­­tals, which play a key role in flat screen televisions, in notebooks/laptops or in mobile phones – the company is a driving force in this technology and world market leader. The probability that these liquid crystals are used in the attractive flat screens of the world-wide leading display manufac­­turers is high. Another example are pearlescent-­effect pigments, a highly spe­­cialized niche of the pigment market, which are for example used in printing inks, lacquers, plastics and deco­­rative and body-­­care cosmetics.

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New technologies are also being developed. For example, these include prod­­ucts such as materials for energy stor­­age in hybrid vehicles, products for the photovoltaic industry or innovative lumi­­nescent materials based on light-emit­­ting diodes (LEDs) and organic light-emitting diodes (OLEDs). The latter are made of ultra-thin layers, which emit light instantly as soon as voltage is applied. Specifically to further de­­velop these inno­­vations, the company opened a research and development centre for 340 employees for approxi­mately 50 million euros in Darmstadt in September of 2010. The two six-storey buildings and clean-room tech­­nical centre are the com­­pany’s largest single investment for re­­search and development in chemistry.
The two pharmaceutical divisions – prescription and non-prescription medicines – had total revenues of about 6.2 billion euros in 2010. The two chemical divisions brought in approximately 3.1 billion euros.

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The name Serono in the pharma division’s name is a reminder of the acquisition of the Swiss biotechnology company at the be­­ginning of 2007, which resulted in Merck becoming a leading global bio­p­harmaceutical company. The portfolio of this division, which at 92 per cent accounts for the largest part of the pharmaceutical sales, includes such important prescription drugs as Rebif and Erbitux: these benefit patients who are suffering from multiple sclerosis or cancer. In addition, medications for infertility, growth disorders, cardiovascular diseases and metabolic diseases are offered – indications which are taken care of mainly by specialists. More than half of the total revenues of the Merck Serono division are generat­ed by biotechnologically produced drugs.

While the prescription drug products of the division Merck Serono help to heal serious diseases and improve the quality of life of patients, the self-medi­cation com­­pounds of the division Con­sumer Health Care aim to prevent illnesses and minor ailments.

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Merck continuously invests in pharma­ceu­­tical research and development. Last year this amounted to almost 1.2 billion euros. Worldwide about 3,000 people dedicated themselves to re­­searching and developing new medications – primarily in Darmstadt, Geneva and Boston. In Darmstadt, in 2010 a total of 609 million euros were spent on research and development (44 per cent of the research & development budget); the investment in property amounted to 168 million euros (42 per cent of the total budget for fixed assets).

Appreciation for the city of Darmstadt is demonstrated by the chemical and pharmaceutical company through initiatives regarding local responsibility in the areas of education, culture, sport as well as in social commitment. To support the up-and-coming generations of scientists, especially in the field of the natural sciences, Merck has for 15 years organised the Hessian regional competition of the re­­nowned “Jugend forscht” program at its location in Darmstadt. (“Jugend forscht” is a German youth science competition. With more than 10,000 participants annually, it is the biggest youth science and technology competition in Europe.) Furthermore the company has for many years supported approximately 40 schools around Darmstadt and Gernsheim. Since 2008, Merck has promoted the so-called “junior laboratory” in collaboration with the Technische Universität Darm­stadt (Tech­nical University of Darm­­stadt). In these newly built premis­es of 200 square metres on the university campus, pu­­pils from pub­­lic schools to students taking final exams for their high-school diploma are encouraged to conduct their own ex­­per­­iments under the guidance of university staff and get to know the world of chemistry.

 

Since exercise is an important balance to daily working life, Merck sponsors more than 150 sports clubs in the city of Darm­­stadt and the surrounding region. To increase the athletic and communal interest of people from the region and to enhance the general awareness about health and fitness, Merck supports, among others, the annual sports and games festival in the Herrngarten Park in the city of Darmstadt. In addition, the company spon­­sors cultural events in the region in collab­oration with local cultural institutions and organisations, for example Central­station (a world-famous concert-venue in the city of Darmstadt). These numerous examples make it obvious: Merck is indeed active in the entire world, but at home in Darmstadt. We come from here and we belong here.

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02289HIGH_KLEY_PORTRAIT-KopieThe author was born in 1951 and studied law in Munich. He held various ex­­ecu­tive positions at Bayer AG. In 1998, Kley became a member of the executive board of Lufthansa AG. In 2006, he was ap­­pointed vice-chairman and in 2007 Chair­­man of the Executive Board of Merck KGaA.