Freudenberg continues profitable growth

Freudenberg, a global technology group, continued its positive business development in India despite the worldwide challenging conditions, with sales increasing by 3.7 percent from Rs. 1,497 crore in 2014 to Rs. 1,553 crore in 2015. "We have completed another year of profitable and sustainable growth. And our companies in India will continue to grow, much faster than in most other regions of the world. Our share in total global sales should increase disproportionally", said Dr. Jörg Matthias Großmann, Regional Representative India, at the press conference in Bengaluru. The company's global sales grew by 7.6 percent to 7.57 billion euros or Rs. 53,730 crore based on pro-rata consolidation of joint ventures.

At December 31, 2015, Freudenberg employed some 2,800 full-time associates at around 50 locations in India – with four R&D centers and 14 production sites with state-of-the-art shop-floors. Globally, Freudenberg employed 40,474 people. Freudenberg's investment in India in 2015 totaled 9.4 million euros or Rs. 68 crore. Those investments were made to upgrade and expand existing manufacturing as well as research and development facilities at almost all Business Groups. 

The biggest investment was made in a state-of-the-art production site, labs and warehouse in the existing speciality chemicals factory in Mysore. The facility was inaugurated in August and is owned by Klüber Lubrication India. It manufactures various specialty lubricating oils, greases, pastes, aerosols and release agents under the name of the Chem-Trend, OKS and Klüber Lubrication brands.

Furthermore Freudenberg Sealing Technologies expanded its commitment in India. The company has been active in the market through its joint venture Sigma Freudenberg NOK in Mohali since 2001. In February 2015 a second, completely new factory in Basma was opened, where some 2,000 employees manufacture seals for the Indian market and for export.

"These two major investments with a total amount of more than Rs. 290 crore in the past few years underscore our long-term commitment to India. Together with our partners, we will expand our presence and continue to invest in India", said Großmann. "We have high expectations as we have significantly invested in the recent past to prepare Freudenberg in India for the future."

Outlook for 2016

On the basis of its current assessment, despite all the challenges faced, the Freudenberg Group in India expects growth in sales of between 7 and 10 percent above the previous year's figure. All Business Groups are likely to contribute to this performance. On a global basis Freudenberg expects stable development in its return on sales. Growth in sales is expected to be between 1.0 and 3.0 percent and profit from operations slightly above the previous year's figure. 

Innovation

Freudenberg invested more than ever before in innovation during the year under review; the Freudenberg Group conducted research and development activities to the amount of Rs. 2,237 crore (previous year: Rs. 2,183 crore). On a euro basis this corresponds to a research and development ratio of 4.2 percent (previous year: 3.8 percent). The objective of all activities is to further increase the share of new products in sales. The share of products less than four years old reached 26.0 percent. A total of 2,772 Freudenberg employees worked in research and development in 2015 (2,582 in 2014). 

Freudenberg in India also follows a strategy of continuous investment in research and development. "At our sites in Mysore, Pune and Mohali the R&D facilities develop products tailored to the needs of our local customers", said Großmann. "It is part of our Group strategy to make globally developed innovations suitable for regional use."

Together for society

The Freudenberg Training Centre in Nagapattinam, India, has been up-and-running for eight years. So far, some 400 young people have completed a vocational training course on site. The Training Centre's curriculum is about to be expanded to include the profession of electrician. 

The Training Centre was established as an aid project in 2008, to give young people a foundation for a better future. The region was severely affected by the tsunami in 2004. Right at the start, there was a vision: to provide career and skill-oriented vocational training for young people. Since then, the Centre has come a long way. Today, it offers government-approved training in welding, fitting, machining and motor mechanics. The first electrician trade students will start training in the coming weeks. There should also be an increase in the number of female students at the Training Centre. "We are continuing the journey that we started almost ten years ago. We faced challenges and hurdles, but when I see the young people who are being trained here, I'm convinced that we are on the right track," said Großmann.