Freudenberg reached new record levels

Beijing, May 15, 2012. For the internationally active Freudenberg Group, the 2011 financial year was yet another record-breaking year in China. At year-end 2011 sales had increased to 3.67 billion Yuan (2010: CNY 3.27 billion), equal to approximately 12.5 percent compared to the previous year. With an increase in sales of around 20 percent in the first quarter of 2012, the Freudenberg Group continues to enjoy success in China. In 2011 the number of associates in China increased by just under 900 to a total of 5,100. “The positive business growth experienced by Freudenberg in China and the outstanding performance of our Chinese Business Groups was an essential factor in the above-average growth rates achieved by the entire Freudenberg Group,” Hanno D. Wentzler, Regional Representative of the Freudenberg Group in China and CEO of Freudenberg Chemical Specialities, said at the press conference in Beijing. “The Freudenberg Group will continue to develop its activities in China over the long-term, through a considerable number of investment projects. We are proud to announce the construction of our new production site in Chengdu. The cumulative amount invested in China since 2004 now totals more than 1.8 billion Yuan.”

The Freudenberg Group reported global sales of around 54 billion Yuan in the 2011 financial year. Adjusted for exchange rate conversion effects, this represents an increase of around 9.6 percent compared to 2010 (49 billion Yuan). Profit from operations (EBIT) increased to 4.6 billion CNY. The 2011 financial year was therefore Freudenberg’s most successful year ever for sales and earnings.

Freudenberg steps up its investment in western area

Freudenberg is continuing to systematically expand its activities in China, adopting a targeted approach to investment in important markets:

  • Global filter production network is expanding with the erection of a new production site in Chengdu. With a total space of 12,000 square meters, the new manufacturing site is situated at Xindu Industrial Park, Chengdu, in the Province of Sichuan. The production of both engine air intake filters and cabin air filters is expected to start beginning of 2013. The cornerstone for the new production site was laid on May 7, 2012 in the presence of Diao Yi, Vice Head of Xindu District, and Hans Mondorf, Consul-General of the Federal Republic of Germany in Chengdu. In January 2012, Freudenberg Filtration Technologies and Japan Vilene Company Ltd. founded this new joint venture to produce micronAir® and Viledon® filters for the Chinese automotive and industrial markets. Freudenberg Vilene Filter Co., Ltd. is the third production plant in China for the filtration specialist alongside the facilities in Suzhou and Changchun. Automobile production in this region is expected to increase significantly in the following years, from 1.8 million units in 2011 to 3 million units in 2015. As other industries are also expanding their production plants to the Central Western part of China, the new site in Chengdu offers additional business opportunities. With an initial investment of CNY 33 million, a total investment of CNY 36 million, Freudenberg will serve the growing demand for automotive and industrial filters in Western China.

Investment stands for long-term commitment

  • One of the largest investments in the 2011 financial year was the acquisition of shares in 13 companies of the “Trade and Investment in Asia-Pacific” (TIA) Group, headquartered in Hong Kong. With the acquisition, the Freudenberg Group has strengthened its long-term presence in household products on the Asia-Pacific market.
  • The site at Qingpu will be expanded significantly. In addition to new offices and production facilities, a new, local research and development center is to be built here. The aim is to respond to increased demand in China with higher quality products and individually-tailored solutions for customers, developed locally. Special lubricants to meet the needs of the Chinese market will in future be developed in the new R&D center. The total investment will amount to more than 150 million Yuan over a three-year period.
  • Production will be expanded at the plant in Yantai which opened in 2010. Chassis components and airsprings for commercial vehicles for the Chinese automotive industry are manufactured at the site. Customers include Ankai, DFM, KAMA, Sunwin and Yutong. A total of 130 million Yuan will be invested in the plant up to 2014.
  • A new production line for accumulators is being built jointly with the joint venture partner NOK at the site in Changchun. The plant is scheduled to start production by the end of this year. Local production will significantly improve the service provided to Freudenberg’s customer, Volkswagen. A two-digit million investment (Yuan) is being made in the new facility.
  • A new production line for the manufacture of PET spunlaid nonwovens is being built in Taiwan. The Tayuan facility serves customers in the markets for carpet tiles, automotive interiors, filters and construction. The new production line scheduled for completion in 2013 will increase capacity in Taiwan by more than 10,000 tons per year. A three-digit million investment (Yuan) is being made in the plant.
  • In addition Freudenberg is setting up a new plant for the production of polyurethane seals in Taicang. The seals will be used in hydraulic cylinders in construction and agricultural machines. This is a very interesting market for Freudenberg which promises attractive growth rates, especially due to the subsidies envisaged by the Chinese government in its current five-year plan.

With a total investment of 357 million Yuan, Freudenberg significantly increased its investment in China in the financial year 2011, compared to the previous year (CNY 177 million). Since 2004 Freudenberg has invested more than 1.8 billion Yuan in China.