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Position AEG PS Group as system solutions provider in the smart grid industry: The power
industry is currently undergoing a change from centralised power generation from traditional en-
ergy sources towards more decentralised power generation from new renewable energy sources.
This development makes it necessary for the electrical grid to be transformed from a facility that is
merely transporting power from one place to the other into a so-called smart grid where electricity
is delivered from energy suppliers to energy consumers using two-way digital technology to con-
trol appliances at consumers' homes to save energy, reduce cost and increase reliability and trans-
parency. It overlays the electricity distribution grid with an information and net metering system.
Management expects that more and more industrial power users will start to use their own power
generating devices like PV systems. As many of these power generating devices provide power on
an irregular basis, these industrial power users will have a need for their own smart grid systems,
the so-called "micro grids". Management believes smart and micro grids to be the major future
trend in the energy market. AEG PS Group possesses the know how to produce many of the prod-
ucts that are necessary to create a micro grid system, such as bi-directional transmitters, convert-
ers, inverters, power storing devices and monitoring systems, and also has the necessary expertise
to design and implement micro grid systems. With this background, AEG PS Group is one of the
"natural" players on the smart grid market. It intends to assign significant financial and personnel
resources to the creation of effective micro grid system solutions in order to capitalise on its fore-
front position. Management intends to position AEG PS Group as a supplier and enabler of the
smart grid.
Further improve operational efficiency: In 2009, AEG PS Group implemented a process aiming
at an increased standardization and modularization of certain product components. This allowed
for a shifting of the production of such components to lower cost production facilities such as
Penang, Malaysia, or to have such components produced by outsourcing partners. Management in-
tends to further pursue this approach by performing a thorough review of all production processes
and the services offered by the AEG PS Group for the potential to save costs and/or transform
fixed costs into variable costs without affecting the quality of the respective products and services.
Management deems it critical to AEG PS Group's competitiveness to constantly search for, detect
and make use of such saving potential.
Manufacturing and Supply
Manufacturing
AEG PS Group has four manufacturing facilities in Europe and Asia. The table below provides an over-
view of locations and sizes of its production sites:
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