What does growth mean to you?
Thomas Früh: Growth is often used synonymously for success. But we can find many examples in nature and the world of business that show that growth at all cost might be rewarding in the short term but will actually pose existential risks in the long term. At Bachem we therefore decide in a very deliberate manner where we want to grow, what the envisioned optimal size would be, and what time frame we want to set for achieving that growth.
Stephan Schindler: Moreover, growth per se as a measure of success is always relative. More and more growth is needed to reach whatever goals are set. Like with a drug addiction, companies can become increasingly ruthless in the pursuit of growth and seek success over the competition at the expense of other stakeholders. We deliberately foster a culture in which nature and our corporate social responsibility are not subordinated to the achievement of commercial success. This means, for example, that long-term profitability comes before short-term growth.
The project portfolio grew significantly last year, like in the previous year. Wouldn’t a sharper focus be better for profits?
Thomas Früh: In the short term, sure, that could be true, but having a large and broad project portfolio will fuel Bachem Group’s success and growth in the medium to long term. As the “Pioneering Partner for Peptides”, we give each and every project entrusted to us our full attention. We support customers at every stage of a project and do our best to ensure that therapeutic agents are developed quickly and efficiently, approved by regulatory authorities and then produced in a consistently reliable process that ensures top quality.
Bachem’s capital expenditure is higher now than it has been in years. Are investment needs really so high?
Stephan Schindler: Amortization has exceeded capital expenditure for the past few years. That is not viable for any company in the long run. It was only possible because we were able to utilize more and more of our existing capacity and thus absorbed additional volumes from a growing market. Since demand is still firm, but our capacity is now fully utilized, we do not want to lose these growth opportunities to the competition.
Where or what are the primary targets of your investments?
Thomas Früh: As Stephan Schindler mentioned, we are primarily investing in capacity expansion projects. The acquisition of American Peptide Company (APC) in March of last year can be seen in this light. APC gave us additional production capacity that we are now utilizing with success. Another investment priority is our plant in Bubendorf, Switzerland. A new building under construction there will provide the additional capacity we need to meet growing demand for NCE development projects. At the same time we are optimizing the availability of high-volume manufacturing assets at the other facilities. Other important objectives are expanding our center of excellence for custom synthesis in England and meeting the increasingly demanding requirements with regard to quality assurance, regulatory affairs and control banding.
Stephan Schindler: Growth on the production side is creating more challenges for internal operations such as the accounting, IT and human resource departments. We are therefore investing in the ongoing professionalization of these units. Investments are also being made in infrastructure. One example here is the new Enterprise Resource Planning (ERP) system.
What will the future bring?
Thomas Früh: (laughs) Nobody knows that. But I do believe the action we take can determine to some extent what our future will look like. Bachem offers its customers the full range of peptide services from a single source – from research chemicals and custom synthesis to compound development and production. We do so with the expertise and experience of the acknowledged sector leader and, thanks to our steady investment in the business, with ultra-modern plant and equipment, reliable quality assurance and control, and cost-optimized processes. For the long-term benefit of all stakeholders.