Our research and development efforts focus on the basic idea of offering customers the greatest possible degree of benefits and production efficiency through our products and services. Our guiding principle is to strive to produce high-quality, effective and reliable products that are geared to meet market requirements.

As a technology leader, we therefore feel a permanent obligation to pursue groundbreaking solutions and exploit the potential to optimise successful product lines. By expanding our product range, we meet the needs of emerging markets. By critically examining our manufacturing and process costs and stringently managing complexity, we move towards our goal of cross-product modularisation of all our components and assemblies. Internationally networked teams of developers with broadly spread specialist and local market expertise now work closely together to develop products that can be used globally.

The Demag Cranes Group believes the large amount it spends on research and development strengthens its operating units and also sees it as an investment in the future aimed at safeguarding its technology leadership in the long term.

In financial year 2008/2009, research and development expenses, including capitalised development expenses, amounted to EUR 28.2 million on a consolidated basis (EUR 0.6 million of which capitalised) compared with EUR 20.4 million (EUR 0.7 million of which capitalised) in the previous financial year. Of these total expenses, EUR 12.2 million (2007/2008: EUR 10.3 million) related to the Industrial Cranes and Services segments and EUR 16.0 million (2007/2008: EUR 10.2 million) related to the Port Technology segment. As a proportion of revenue, research and development expenses amounted to 2.6 percent (2007/2008: 1.6 percent).

Research and development activities in the Industrial Cranes segment focused on further additions to the product portfolio as well as improvements in terms of product modularisation and complexity. Special attention was paid to the diverging needs of established and emerging markets. Besides product-specific development, we also pressed ahead on a sustained basis with the ongoing expansion and rollout of IT systems for process support. Development activities for established markets continued to focus on consistently advancing application-driven options in the DR rope hoist, DC chain hoist and Dedrive frequency inverter ranges. Enhancement and implementation of these product options is now largely complete, ensuring product deployability in target application environments. Extension of the performance range also lay at the centre of R&D activity directed at Standard Cranes. Altered customer requirements with regard to load capacities and spans resulted in an increase in maximum performance across the board. We also implemented our new range of girder cranes and generally extended and standardised the choice of options. Emerging markets pose special requirements for the product portfolio. This has led to a number of product modification projects and the launch of various new developments on the cranes and components side. Our first international development teams were established with members from India, China and Germany to pool expertise and experience from very different markets and regions. Activities in connection with standards and directives focused on ensuring conformity with the new EU Machinery Directive, which comes into effect throughout the European Union from 29 December 2009. In the course of expanding our IT-based quotation and order-processing systems, new configurations were successfully implemented and integrated into our systems environment for compact hoist, rope hoist and drive products. This completes a further important step towards improved process reliability and enhanced efficiency.

In the Port Technology segment, we continued updating our range of Mobile Harbour Cranes with regard to the Compact Class in the course of introducing the new Generation 5. We aim here to extend our technology leadership at the lower end of the range by employing frequency-controlled asynchronous motors for the main motions. Energy efficiency has also been improved on Mobile Harbour Cranes and energy recovery technologies have been developed in a test facility. This option will be ready for the market in the next financial year. On diesel engines, we have begun with application of the US Environment Protection Agency (EPA1) Tier 4i emission standards for off-highway diesels, due to take effect in 2011, which require major reductions in nitrogen oxides and particulates. In the semi and fully automated port technology product line, the priority lay on further development of our Automated Guided Vehicles (AGVs) and technical adjustments to our Automated Stacking Cranes (ASCs). Maritime ports the world over show a strong trend towards enhanced environmental responsibility. This goes hand in hand with an ongoing tightening of maximum permitted emission levels at sea terminals. To serve this trend, we have investigated the use of batteries as an energy source for AGVs and have now taken them as far as the test phase. A battery-driven vehicle is currently in live test operation at Container Terminal Altenwerder (CTA) run by our customer Hamburger Hafen und Logistik AG (HHLA). To enable deployment of a battery AGV fleet, we are presently developing an automated battery exchange and charging station (see the Environment section for detailed information).

All the above R&D activities are actively supported by our Services segment to maximise benefits – notably with regard to operation and maintenance – and ensure the provision of all resources and expertise needed by our service force. We also develop associated spare part and service packages to span the entire crane and component life cycle and application range.