BERLIN: Small manufacturers with niche products are driving Europe’s biggest economy as the region struggles to boost growth.
On the edge of the snow-dusted pine forest surrounding Siegen, Germany, workers at the Erich Utsch AG plant are building a staple of American prisons: the equipment convicts use to crank out vehicle license plates. Three refrigerator-sized presses taking shape on this February morning will head to Nevada.
“I always wanted to sell our machines internationally,” says Manfred Utsch, the son of the company’s founder. “Now, 80 percent of our revenue comes from abroad.”
Utsch, with its niche product and exporting zeal, is one of the 3.7 million small and medium-sized companies driving Europe’s biggest economy, Bloomberg Markets magazine will report in its May issue.
Germany calls them the Mittelstand. They make everything from prosthetic limbs to church organs, typically bringing in annual revenue of less than 50 million euros ($54 million) apiece. Most are family owned, like Utsch.
Mittelstand companies wield broad clout despite their narrow, sometimes quirky, goods. They account for more than half of Germany’s economic output and 63 percent of its employees. They contributed 18 percent of exports in 2012, according to the German Federal Statistical Office. Last year, Germany claimed the world’s largest current-account surplus; its record 215.3 billion euros trumped China’s 176.7 billion euros.
