Germany’s healthcare and chemicals group Merck KGaA announced a €10 million ($11.9 million) partnership with Siemens to digitalize and automate modular production.
As part of the partnership, Merck KGaA (GB:0O14) will invest €10 million in a new modular infrastructure plant tailored for the production of materials and products for the electronics, pharmaceutical and life science industries. The plant is expected to be built at Merck’s site in Darmstadt by 2022.
The project is part of a €1 billion investment program up until 2025 for Merck’s global headquarters in Darmstadt. It will also be funded by the German Federal Ministry of Economic Affairs and Energy as part of a government effort to reduce carbon footprint of production.
“In the smart factory of tomorrow, everything will revolve around flexibility, networking and efficiency,” said Merck’s Kai Beckmann. “The time needed from the product idea to market readiness is a critical success factor. The resulting technology platform for standardized, modular production will also be usable in product development in the future. This allows data-based decisions to be made as early as the product development phase and applied seamlessly to the production process. Therefore, in the future, we will be able to respond quicker and even more flexibly to high customer requirements.”
Using a supervisory control system, known as the process orchestration layer (POL), various production modules will be interlinked to an overall process. “In the future, this should occur without additional programming effort – similar to the USB standard for electronic devices,” Merck stated.
As part of the collaboration, Merck, which is backed by the likes of Blackrock and Sun Life Financial, will be responsible for the production infrastructure, and Siemens will be taking charge of the development of POL technology.
Shares of Merck climbed almost 25% so far this year, and the stock scores a cautiously optimistic Moderate Buy analyst consensus. That’s with 6 Buys versus 6 Holds and 1 Sell rating. (See Merck stock analysis on TipRanks)
Meanwhile, the average analyst price target stands at €133.42, implying a modest 1.6% upside potential over the coming 12 months.
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