In 1989, when I became Chief Executive Officer of the Franke Group, it was my intention to become Number 1 in clearly defined core areas of business. This goal was very ambitious, and probably set too high in view of the market position at that time. But we made it, and our "concentrate and dominate" motto still determines our actions today. This year we have clearly pursued our leadership strategy. Besides the sink factory in India, we are investing in our own assembly plant in Romania. Moreover, we succeeded in acquiring the largest sink producer in South Africa this year. Other important projects have also been launched - especially in China, Spain, Poland, Germany and the USA. Further important activities are currently being planned. Our local managers are heavily supported by the leadership theme and distinguish themselves by good structures and excellent project responsibilities; quality, efficiency and productivity are constantly monitored and improved.

In regard to the Indian project, I'm especially happy to see Franke once again taking the classic role of pioneer. We are the first on the spot, not only as a sink distributor, but also as a producer. In general we put our money on markets with a strong future potential, and the Indian market with its one billion inhabitants is undoubtedly one of these. For this we are prepared to accept long term market investments with the commitment and difficulties they entail. Only in this way can we maintain and, more importantly, increase the global market leadership of our three branches.

In general, I see the development of the world economy as no longer quite so rosy. We have to expect more risks in the future. For this reason we should proceed more conservatively in our thinking and, on the whole, let ourselves be guided once again by the "old economy" concepts. Despite my reservations, I remain optimistic about the development of the Franke Group, and hope that next year we can continue to work together successfully with our customers, trustworthy suppliers and above all with our hardworking, qualified and courageous employees.

I wish you - dear readers - a relaxing festive season with your families, good health, and a successful New Year.

Kind regards

Michael Pieper, President & CEO