Freudenberg acquires business operations of Trade & Investment in Asia Limited (TIA)

Shanghai, November 1, 2011. The Freudenberg Group is continuously expanding its activities in China. In the second half of October, Freudenberg signed a contract to acquire 100 percent of the business operations of Trade & Investment in Asia Limited (TIA). With a rise of 11.9 percent in sales in the third quarter of 2011 compared with the same period of the previous year, the Group reported a further positive development. For example in Suzhou, the manufacturing capacities in technical nonwovens for the automotive industry have been increased by 25 percent. Since 2004, the total investment of Freudenberg in buildings and production plants has amounted to about CNY 1,766 million.

TIA, with headquarters in Hong Kong, manufactures household products in Ningbo and exports them to six Asian countries. The company recorded sales of about CNY 190 million in 2010. "The acquisition of TIA is another milestone in our long-term growth strategy in China," said Hanno D. Wentzler, Regional Representative of the Freudenberg Group in China, at the press conference held in Shanghai on Tuesday. "TIA's business supplements the portfolio of our Business Group Freudenberg Household Products in an ideal way. In addition to its Vileda premium brand, Freudenberg Household Products will also be represented in the mid-price segment by the SWASH brand in the future."
Apart from a new production facility in Ningbo, Freudenberg is acquiring the company's consumer goods business and its sales branches in six Asian growth countries with a total of 750 associates. The acquisition will take Freudenberg Household Products a major step closer to achieving its sales target of significantly more than 100 million euros per year in this region by 2014. "We want to expand our business continuously and successfully and to convince the present customers of TIA with first-class service and performance," Joanna Zhao, General Manager of Freudenberg Household Products in Suzhou, underlined.

Vileda has been active on the Asian market since the mid 1990s and now has its own offices and organizations in China, Hong Kong, Australia and New Zealand. Since 2009, the brand has also been active in India via the joint venture Freudenberg Gala Household Products. Sales in this key region for expansion were boosted by 24 percent in 2010. In total, the globally active branded goods specialist recorded sales of 667 million euros last year.
TIA products will continue to be marketed under the SWASH brand. With SWASH, Freudenberg Household Products will be acquiring a major brand with strong growth in China and Hong Kong, where it will supplement the Vileda premium brand, as well as in the markets of Thailand, Malaysia, Indonesia and Taiwan, which are new for Freudenberg Household Products. "The products such as brooms, mops, dish-washing brushes and plastic goods will then be available in about 3,000 stores in Asia, including WalMart, Carrefour, Tesco and Metro," explained Joanna Zhao.

Freudenberg continues to grow in China

In the 2010 financial year, the Freudenberg Group achieved new records in China. Compared with the previous year, sales grew by 46 percent to CNY 3.27 billion (2009: CNY 2.24 billion). The number of associates has grown to about 4,870.
In Suzhou, the company produces nonwovens to be used in automobile interiors, for example for ceilings, seat covers, and rear shelves. An innovation made it possible in recent months to produce much lighter nonwovens, which has a positive impact on fuel consumption and air pollutant emissions.
In Taicang, the product portfolio will be expanded. Freudenberg sees great potential on the market for construction machinery seals. Therefore, Freudenberg will supply the mobile hydraulics market with polyurethan seals. The company provides local customers with fast supply chains and flexible production capacities.
Freudenberg’s business in the new areas of surface treatment and automotive spare parts develops extremely well. The Group’s strategy of continuous expansion with new products and services in China has proven successful and will be continued. A few months ago, for example, Freudenberg has inaugurated a vast office and warehouse space at a second location in Shanghai for the spare parts business, which provides customers with even greater security and optimized delivery processes and brings innovations to market even quicker than before.
All in all, the internationally active Freudenberg Group recorded sales of about CNY 50 billion throughout the world in the 2010 financial year. After eliminating exchange rate effects, this represents a rise of about 30 percent compared with 2009 (CNY 41 billion). Growth has now fully compensated for the slump caused by the economic crisis in 2009. Profit from operations (EBIT) grew disproportionately by CNY 5.29 billion to CNY 3.85 billion. In terms of sales and profit, 2010 was therefore one of the most successful financial years in the history of Freudenberg.