Freudenberg Steers Its Focus On Growth From Emerging Technologies

Despite challenging conditions in multiple market segments and world regions the global technology group – Freudenberg  achieved sales growth of 13.5 percent to €8.6 billion or Rs. 63,835 crore in calendar 2016, based on the pro-rata consolidation of joint ventures.

In India too, the group continued its positive business development. “With our plan to invest in a new production facility in the city of Chennai we underline our long-term commitment to the local market and support the ‘Make in India’ initiative,” said Dr. Mohsen Sohi, Freudenberg Group CEO, at the press conference in Bengaluru. In the first phase the plant that will come up in Vallam Vadagal industrial area, will make sealing products. It may be noted that this industrial park is in close vicinity to Oragadam, the home to several OEMs including Daimner India CV, Renault Nissan, Ashok Leyland, India Yamaha and Royal Enfield.

In India, Freudenberg’s 7 business groups generated sales of Rs. 1,483 crore, an improvement of 20 percent compared to the previous year. Employee numbers rose by 17 percent to 2,475 employees at around 50 locations in India – with six R&D centers and 14 production sites with state-of-the-art shop floors. This increase in sales and employees can be attributed to a large extent to the acquisition of Vibracoustic. The Business Group operates production, sales and service sites in India.

“In 2016, Freudenberg invested €8.6 million or Rs. 62 crore in India,” said Georg Graf, Freudenberg Regional Representative India. “Investments were made across the board, at all Freudenberg Business Groups, in manufacturing and research facilities and equipment.” Over the past five years Freudenberg has invested a total of Rs. 363 crore. And Freudenberg continues to invest in India. The Group plans to start the construction of a new production facility in autumn 2017, 50 kilometers to the southwest of the city of Chennai. The total investment is 15 million euro or Rs. 111 crore. The site, located in the Vallam-Vadagal Industrial Park, plans to produce innovative sealing solutions for the automotive industry, among other products. The land acquired consists of more than 56,000 m² – with the capacity for further site development. As a global market leader for automotive seals Freudenberg wants to best serve its customers in the strong automotive hub of Chennai.

Changing Landscape

With the prospects of change in mobility visible across the globe Freudenberg Group has been gearing up to cater tto the emerging segment. With up to 300 different Freudenberg components found in any given car model, it is not surprising that the German technology group is already actively working with its customers to address the challenges that arise from this mobility shift. Components are found in batteries, engines, charging units and many other elements. Innovative solutions from the company help make cars safer thanks to state-of-the-art battery components. Filters ensure clean cabin air. A broad-ranging sealing technology portfolio increases useful lifetime and improves thermal management. Cars make less noise thanks to advanced anti-vibration technology and specialty lubricants make them more efficient.

In 2016, Freudenberg generated some 40 percent of its global sales from its activities in the automotive industry – in India about 50 per cent. Already today, products are being used in hybrid and electric vehicles. Battery components, including Freudenberg’s Safety Separator, help make cars safer while at the same time extending their service life. A wafer-thin yet extremely durable non-woven separator, equipped with a functional ceramic material impregnation, keeps the plus and minus poles permanently separated. This minimizes the risk of short circuits or even battery fires while allowing the ions and thus the current to flow freely.

With its wide product portfolio Freudenberg is the right partner to drive e-mobility in India forward. Today, only 1 per cent of 200 million vehicles on Indian roads are e-vehicles. The country is thinking of switching most vehicles to battery power by 2030. Key will be the provision of subsidies driven by a battery leasing strategy. Freudenberg is ready to enter into a close dialogue with its Indian customers, contributing leading-edge expertise built on a long history of supplying battery components.

Outlook

On the basis of its current assessment, despite all the challenges faced, the Freudenberg Group expects global organic growth in sales of between 1.0 and 3.0 percent and profit from operations slightly above the previous year’s figure. Almost all Business Groups are likely to contribute to this performance. On the basis of this forecast, Freudenberg expects stable development in its return on sales. The Freudenberg Group forecasts profitable double-digit growth in India for 2017.

Featured Photo Caption: Dr Mohsen Shoi, CEO, Freudenberg Group (second from left) is flanked by Cornelia Buchta-Noack, Head CorpComm, Freudenberg Group, Georg Graf, Regional Representative India and Sivasailam Gunasekaran, CEO, Freudenberg Performance Materials India.

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