DUBAI, UAE, Dec. 1, 2025 /PRNewswire/ -- Ulrich Leidecker spoke about the ongoing economic tensions in Germany at this year's Phoenix Contact press conference held at the SPS automation trade fair in Nuremberg, Germany, from November 25 to 27. "We are seeing that companies in Germany are having to adapt their structures in order to remain competitive. We at Phoenix Contact are also being forced to adapt our corporate structures to the circumstances in order to ensure resilience and value creation. We are bringing our value creation closer to the sales markets and aligning our structures internationally", explained Leidecker. There is no spirit of optimism in industrial policy yet, and over-regulation is inhibiting innovation. Even on topics that have been discussed for a long time, such as the Supply Chain Obligations Act and CSRD reporting, there has been no noticeable alleviation. This is necessary to give the industry the security to concentrate on innovations again.
The market has developed in ways that are significantly different from those we expected in recent years due to the changing framework conditions. The current economic development in Germany is not a classic economic crisis, but rather a fundamental change in geopolitical structures. "We must learn to work together more strongly in order to remain competitive internationally", said Leidecker, describing the situation. "The fragmentation of our industry and the multitude of individual interests make it difficult to set common standards and drive innovation".
Global challenges, such as tariffs and geopolitical uncertainties, are also influencing the decisions made by Phoenix Contact. "The political framework conditions are volatile, and we as a company must remain flexible and adaptable", explained Leidecker. The company is positioning itself for the future, aiming to accommodate the global growth that is being witnessed in particular in the core regions of China, India, and the USA. As part of this, Phoenix Contact is further expanding its local value added chains in these countries.
International developments
Developments in China remain positive for Phoenix Contact. "We are known there as a 'Chinese-German company' and we benefit from our long-standing presence and good reputation", said Leidecker, describing the situation. The markets are also developing stably in other regions, including the USA and Mexico. The company is relying on a balanced international presence in order to spread risks and seize opportunities.
Investments
Global supply chains depend on capacity, technology, and speed. For this reason, Phoenix Contact is investing in Mexico, in the Querétaro region. This 20,000 square meter location, of which 10,000 square meters is for production, will play a central role in the global production network in the future. The Querétaro region is located in central Mexico between the central ports of Veracruz and Manzanillo, and is logistically well-connected to the US.
Phoenix Contact opened a new location in Vietnam at the beginning of November. This is a strategic milestone for Phoenix Contact in Southeast Asia. The plant near Ho Chi Minh City combines production and logistics for the core businesses of Power Reliability and Automation. This location, with around 100 employees and state-of-the-art manufacturing processes, will serve regional and global markets.
Phoenix Contact is also clearly committed to Germany as a location, as demonstrated by its extension to the existing logistics building in Blomberg. This building is scheduled for completion in 2028. The fully automated logistics building will provide 200,000 m³ of additional storage volume. At more than 100 million euros, this is the company's largest single investment. The decision for the logistics building is a future-oriented investment.
Economic situation
This year, Phoenix Contact is experiencing a moderate market recovery in the upper single-digit range. This is a positive development compared to 2024. Nevertheless, we have not yet recovered the decline in sales witnessed in 2023. We will continue to focus on our core business as well as on the sustainable alignment of our structures. Phoenix Contact is expected to close the fiscal year 2025 with a turnover of 3.3 billion euros.
Innovation and sustainability
"Despite all the challenges, we are convinced that technology is the key to a sustainable future", stated Leidecker. Therefore, Phoenix Contact also focused on innovation, cooperation, digitalization, artificial intelligence, cybersecurity, and energy resilience at this year's trade fair appearance. These topics are the levers for the future. Phoenix Contact also demonstrated practical applications that offer real added value to its customers.
Sustainability also remains a central issue for Phoenix Contact. The company is working in a targeted and continuous manner to design its processes and products more sustainably, from development, through production, right through to logistics. "The current regulatory density makes it difficult for companies to implement sustainable solutions quickly and efficiently. "That said, sustainable business practices and economic success are not mutually exclusive", stated Leidecker.
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