The world's demand for alternative energy sources is powering growth in German industry, or so a look at the list of fastest-growing public companies in that country would suggest. Already the world leader in solar panel manufacturing, Germany is also home to an array of booming companies whose business is on the more peripheral side of clean energy creation and conservation.

Indeed, four of the German companies on the IBTimes 1000 list of fastest-growing public companies in the world are just that kind of firm. The IBTimes 1000 is an yearly listing that calculates public companies' three-year compounded annual growth rates.

These companies, high-tech concerns requiring specialized engineering and manufacturing knowhow, are succeeding in creating good, high-paying jobs in Germany and beyond. And whether it's biogas plant builder 2G Energy AG or geothermal drilling specialist Daldrup & Soehne AG, specific companies in this subsector of German industry are seemingly combining some of the best long-standing features of the German manufacturing sector -- management that is focused on technological research and is not afraid to sink capital into long-term strategies -- with an uncanny corporate spirit that allows companies to constantly re-invent themselves. Favorable public policy is helping out as well.

One example of such a company is Manz AG, best known as a photovoltaic cell supplier to the solar-panel building industry. The company, run by the engineer who founded it in 1987, seems to be constantly defining itself to meet the demand of the markets, going from a robotics and automation products manufacturer to focusing nearly exclusively on semi-conductor products. It continues this dynamic into the present: after first partnering with competitor Würth Solar GmbH & Co. to work on new photovoltaic panel cell technologies, the company bought out its partner in December of last year. It then immediately turned around and started developing new applications for its just-acquired technologies -- modifying them slightly so that they could be used in flat-panel displays instead of solar energy arrays. With that single successful move, the company diversified its revenue portfolio, giving itself some breathing room in the face of volatile global demand for solar panels.

Having successfully implemented our diversification and integration strategy, the results we have achieved once again underscore our powers of innovation, Dieter Manz, CEO of Manz AG, said in a March 28 statement after the company announced record annual sales By transferring technology between sectors, our business model is becoming increasingly robust against cyclical fluctuations in individual industries.

Another good example: Steico AG, a wood and pulp products company that, since 1986, had focused on commodity products like laminated hardwood floors, lumber and wooden joists. Since 2008, however, the company has been focusing on wood fiber insulation boards, becoming the world leader in building ultra-efficient hemp-and-wood insulation products.

Dynamic Models, Stable Management

Of course, in order to pursue transformative long-term strategies of this sort, stable management that is not afraid of being sacked for short-term blunders is key. And German industry, where an unusually high number of public concerns are controlled by founders' families or special-purpose non-profit institutes, provides the framework for that to happen. Steico AG, for example, went public in 2008 in an offering that was six times oversubscribed and priced the company at the highest end of the valuation range, fetching 73.4 million euro. But in spite of the high interest, founder Udo Schramek kept over 70.3 of the company as a personal stake, retaining absolute control of the company's decisions.

The ability to form strategy without having to appease short-term investors has served the company as it has expanded major manufacturing operations into Poland, France and the United Kingdom, often positioning itself as a supplier ahead of the demand curve. It has also served to validate the company's brand as a firm that is legitimately concerned with the environment, an assertion that, coming from a former timber company, used to be met with skepticism.

Demand would be driven by the trend towards environmental and energy-efficient construction, Schramek told a German ecological magazine in 2007, before taking his company public, adding we are confident that this trend continues in the face of rising energy prices.

Energy prices plummeted in 2008, a result of the global financial crisis, but that did not seem to test the company's stated resolve, or its commitment to environmentalism: the firm choose to install environmentally-friendly biomass boilers, rather than cheaper alternatives, when it built its plant in Poland in 2009.

Daldrup & Soehne AG, a specialist manufacturer of drilling technologies used in geothermal energy solutions, is yet another example. Two-thirds-owned by the Daldrup family, it has focused not on aggressively competing in the global marketplace, but on becoming the top producer in its product category and establishing strong collaborations with companies in its ecosystem, making itself an integral and irrepleaceable component of geothermal explorations projects throughout Europe.

Marques Mendes & Associados LDA, a Portuguese boutique investment firm, wrote in a January report that while stock market traders had not been keen to this strategy, Daldrup & Soehne's underlying fundamentals will determine the stocks long-term performance adding analysis of Daldrup & Soehne AG reveals a company with a high quality and strong long-term business growth.

Overall, we believe Daldrup & Soehne AG to be a good long-term investment, the report concluded.

Government support

A final component helping the companies greatly: public policy support from a government that sees promoting clean tech manufacturing as a priority, even if the companies benefiting end up building their factories in other countries.

The partnership between Manz AG and its competitor Wurth Solar, the one from which Manz derived its latest profit-driving technology, was part of a government-sponsored venture with the Centre for Solar Energy and Hydrogen Research Baden-Württemberg, a non-profit institute.

The government has also supported 2G Energy, which develops combined heat and power biomass-fueled plants, and is of late focusing on expanding operations in the United States. Part of the reason is a government that believes it is important for its companies to diversify into various markets, given the volatility of the Eurozone, or as Michael Turwitt, CEO of subsidiary 2G-Cenergy, said in a March statement, achieve continuous economic success in the dollar region.

In addition to a further expansion of production capacities and development of new products, we are also looking at further internationalization of the agenda, Christian Grotholt, chief executive of 2G Energy, said in a Dec. 29 interview with a German stock market news site.

And recent government action was helping.

Due to the amendment of the [landmark clean tech legislation] EEG, we are very confident in our business. 2G is here is to open up additional opportunities, he said.