Freudenberg continues growth in China without slowing

Beijing, May 22, 2013. For the internationally active Freudenberg Group, 2012 was yet another record-breaking financial year in China. Compared with the previous year, sales rose by about 11 percent to 4.07 billion Yuan (2011: CNY 3.67 billion). The successful trend continued in the first quarter of 2013 with growth in Mainland China of about 13 percent. In 2012, the number of associates in China increased by almost 600 to a total of 5,684. “The share of China in the overall sales of the Freudenberg Group is growing continuously. We are further expanding our production capacity and sales channels and rely on the innovative power of our associates in the country,” said Hanno D. Wentzler, Regional Representative of the Freudenberg Group in Asia and CEO of Freudenberg Chemical Specialities, at the press conference in Beijing.

Over the past ten years, Freudenberg has invested more than two billion Yuan in China. Recently a new factory for automobile and industrial filters was inaugurated in Chengdu. In the near future, the expansion of the Qingpu plant will be completed – a new research and development centre and additional production capacity and offices for chemical specialties are being built here at a cost of about 150 million Yuan. The newly established TrelleborgVibracoustic joint venture is currently doubling its production area in Yantai to about 17,000 square meters.

The global Freudenberg Group

Not only in China has the Freudenberg Group reported record sales. Throughout the world, the Group reached sales of about 52 billion Yuan in 2012. This corresponds to a rise of about 5.3 percent compared with 2011. Profit from operations (EBIT) was up 4.1 percent to 4.4 billion Yuan. The internationally active company grew sales for the third year in a row in the 2012 financial year, recording yet another all-time high in the history of the company spanning more than 160 years.

Further strategic development of portfolio structure

The Freudenberg Group has further developed its business in strategic growth markets and expanded its position in established areas of business. TrelleborgVibracoustic began operating on July 2, 2012. The 50:50 joint venture between Vibracoustic and the automotive antivibration business of Trelleborg AB, Trelleborg, Sweden, develops and produces vibration control solutions for all carmakers and all vehicle segments in all major automotive regions. Furthermore, Freudenberg Sealing Technologies acquired 50 percent of the shares in the Schneegans Group from Germany. The acquisition gives Freudenberg access to know-how on the manufacture of high-quality thermoplastic products.
Freudenberg concluded acquisitions to strengthen the strategic growth areas of medical technology and oil and gas. Helix Medical acquired MedVenture Technology Corporation in the USA. This company is a leading designer and manufacturer of medical technology solutions for minimally invasive surgical devices. Helix Medical acquired 50 percent of the shares of Cambus Teoranta of Ireland effective January 1, 2013. The company manufactures high-quality precision components for medical instruments.

Freudenberg Oil & Gas acquired the Vector Technology Group of Norway at the beginning of 2013. Vector is a major global supplier of high integrity sealing solutions for the upstream segment of the oil and gas market. Furthermore, Freudenberg also acquired Scott-Matrix Ltd. in Great Britain, a manufacturer of elastomeric sealing solutions for the oil and gas industry. In addition, EagleBurgmann purchased the business of SealPots Inc. in the USA, a manufacturer of supply systems for the oil and gas industry.

Freudenberg Filtration Technologies acquired part of Pyramid Filters Private Limited, India, in early 2012 as well as Aquabio Limited, United Kingdom, effective March 1, 2013. Pyramid Filters develops air filter elements and systems for applications in clean rooms in the pharmaceutical, medical, chemical and food industries. Aquabio is a leading specialist in turnkey membrane filtration systems for water and wastewater recycling in industrial applications.

Freudenberg forges ahead through innovative power

Innovations originating within the Group will be one of the main driving forces for the success of Freudenberg in the future. In 2012, the Freudenberg Group expensed a total of about 1.8 billion Yuan for research and development. 2,244 associates (previous year 2,187 associates) were employed in research and development.

Freudenberg motivates all employees to contribute even more ideas to the company. For this purpose, the “Idea Pool”, an initiative for new business ideas, was established on an international basis – with considerable success in China. Within about six months, associates in China have already submitted more than 500 ideas. The market prospects of these ideas are now being reviewed. Internationally, the Idea Pool has led to the development of an entirely new Freudenberg product, Purtex®, a physiological and environmentally compatible textile finishing agent, entirely free from fluorocarbons, solvents or other materials that are detrimental to human health and the environment.

Purtex® – a new solution for the Chinese textile industry

Innovative Purtex® technology combines high functionality of the treated textiles with the highest possible standards for environmentally compatible production. “In the development of Purtex®, we focused strongly on environmental protection, higher safety levels in production and the protection of consumers. In the selection of raw materials, we ensure that no critical substances are used. This way, we protect the environment, consumers and textile workers,” explained Alex Guo, Purtex Sales Manager, Greater China. Depending on the textile’s intended application, Purtex® can be custom-formulated to create specific characteristics. Purtex® makes textiles soft to the touch, highly durable and wear resistant, water repellent, and UV-resistant.

Purtex® polyurethane emulsions are solvent-free and 100 percent water-based, offering considerable advantages compared with common alternatives. Perfluorinated compounds (PFCs) have been used for the production of impregnating agents and polymers for 50 years. For many years, some perfluorinated surfactants have attracted attention because they have become widely distributed in the environment and have even been found in human blood and mothers’ milk. The most widely investigated substances are perfluorooctanoic acid (PFOA) and perfluorooctanesulfonic acid (PFOS). These are non-biodegradable, bio-accumulating compounds. These chemicals are therefore seen as critical to human health. With the same quality and functionality, Purtex® is entirely free from deleterious substances and therefore has no harmful effects on human health or nature. Asia, and especially China, is a key market for Freudenberg in view of the large quantities of outdoor and sports clothing manufactured in the region.