From a sprawling plant near the town of Coburg, German firm Kaeser churns out tools for some 100 nations worldwide, one small cog among millions powering Germany's huge export engine.

With German exports topping the trillion-euro (dollar) mark for the first time in 2011, the world's second biggest exporter after China relies heavily on small and medium-sized firms like Kaeser to keep the motor humming along.

Employing some 4,000 people worldwide with a presence in 80 countries, Kaeser makes 70 percent of its 560-million-euro profits abroad.

"Germany is a country without many raw materials but we can sure produce machines," said boss Thomas Kaeser.

"Our domestic market is too small, so we owe our survival to exports," he told AFP during a tour of the factory.

Kaeser's main product is air compressors, used in industrial plants and public buildings and varying in price between a couple of hundred euros to one million, depending on size.

Considered the "Mercedes" of the air compressor world, Kaeser's strength lies in its flexibility, its boss said.

"We can deliver air compressors made to measure, like a suit. We spend a few days with the client assessing the needs of the factory before providing tools that are tailor-made," he said.

"Our clients are prepared to pay for our efficiency and reliability. If the compressed air stops flowing, it's like a power cut, the factory stops working," added the industry chief.

It is this nimbleness that sets German small and medium-sized firms (SMEs) apart, said Sebastian Dullien, a researcher at the Council on Foreign Relations think tank.

"German firms excel in making high quality niche products. They react quickly to the needs of the client and immediately send technicians to the four corners of the globe if needed," Dullien told AFP.

"The staff of these SMEs is extremely qualified and specialised," he added.

There is another, historical, reason German firms have been able to conquer the export markets of the world, explained Jean-Louis Thieriot, a lawyer specialising in Germany.

"Stripped of their colonies, Germans were forced very quickly to find new markets abroad," he said. They also quickly realised the need to speak English to thrive in the business world, he added.

Kaeser, who speaks fluent English and French in addition to his native German, said he did not share the view of Anton Boerner, head of the German Exporters Federation, who has said Germany could survive if the euro collapsed.

Married to a Greek woman, he said he was "convinced" of the benefits of the euro, despite the recent turmoil.

"Without the single currency which has removed exchange rate fluctuations, our firms would be less strong," he stressed.

And despite the temptation to shift production abroad to take advantage of lower labour costs, Kaeser has stuck to its home base, with almost half of its global staff based in Germany.

"Even if the product would be cheaper, I don't think it would be the same quality," he said.

Kaeser also places a strong emphasis on training up its 250 interns, despite costing the firm around 25,000 euros a year each, explained Michael Scheler, in charge of training.

"We cannot find people on the job market who can be put straight to work unless they have followed this training," he said.

As European economies battle to compete with the rising giants in Asia, Thomas Kaeser is relatively confident his firm can continue to keep its nose in front.

"We shouldn't fear it," he said.

"We should respect it, watch it closely and keep out in front, especially by investing in research."