Increased Customer Demand Drives China Based Innovations

Shanghai, July 14, 2014. The Freudenberg Group in China today reached a milestone in the site expansion project for speciality lubricants and high-performance release agents in Qingpu, close to Shanghai. A new state-of-the-art research and development center, as well as administration and training facilities, have been commissioned by Klüber Lubrication and Chem-Trend. Both companies are Business Units of Freudenberg Chemical Specialities. Over the course of three years it is planned to invest more than RMB 150 million into the entire expansion project for the 2008 inaugurated site. "Customer proximity and customer service have always been at the core of our successful development in China to date. The new R&D center will enable us to even better meet the ever-increasing demands of our local customers for cutting-edge innovations and technology", expressed Hanno D. Wentzler, Regional Representative Asia of the Freudenberg Group and CEO of Freudenberg Chemical Specialities during the opening ceremony.

As a next step, Freudenberg plans to expand the manufacturing facilities for speciality lubricants, release agents and process aids. An extended warehouse and bulk storage capacities are also planned. By the end of the expansion, the Qingpu site will have an area of some 66,000 square meters.

Freudenberg Chemical Specialities is a Business Group of the globally-active Freudenberg Group which consistently pursues an investment policy based on the requirements of regional markets. The opening of the Freudenberg Chemical Specialities' new R&D center is considered an essential pillar of Freudenberg's growth strategy in China. In 2013, Freudenberg reported record sales in the country of 5,412 billion RMB, a 33% increase compared with 2012.

"Our overall investment concept in China is in line with market and customer requirements. This also applies to our innovation strategy. We react to the growing demands of our customers for the development of innovations that meet the specific needs of the Chinese market", Wentzler added. During the last decade, the Freudenberg Group has invested some 2.3 billion RMB in sites, production facilities and technology centers in China.

 

The market requires additional investment
Since entering the Chinese market in the 1990s, Klüber Lubrication and Chem-Trend have steadily expanded their operations and businesses. In 2008, after several years of planning, the current production site in Qingpu was opened. The plant produces speciality lubricants, high-performance mold release agents and processing aids for automotive applications, conventional and renewable energy production, general industry, the textile, apparel and shoe industry, construction business, the transportation industry and many others.

The expanded Qingpu site will become the largest sales and manufacturing site in Asia for Klüber Lubrication and Chem-Trend. The new R&D center consists of test areas for application testing and engineering as well as special laboratories for Chem-Trend release agents and process aids and Klüber Lubrication speciality lubricants. Chem-Trend and Klüber will focus on specific development projects. Local customers often have different requirements with regard to response times and time-to-market cycles in contrast to customers from other world regions.

 

Commitment to innovation as part of the Corporate Culture
Today, Freudenberg's global innovation activities are based on three pillars:

  • Market-driven innovations through the Business Groups for their respective markets and market segments.
  • Across-the-board developments being of relevance for more than just one Business Group – coordinated by Freudenberg New Technologies, the "R&D-arm" of the Freudenberg Group.
  • Obtaining additional know-how through targeted acquisitions.

The company aims to steadily increase the share of newly introduced products to total sales. In 2013, 27.5 percent of the Group's turnover was achieved from products younger than four years old. Overall Freudenberg spent RMB 2,273 million on research & development in 2013 (a plus of RMB 270 million compared to 2012). More than half of this amount was allotted to the Business Groups Freudenberg Sealing Technologies and Freudenberg Chemical Specialities, as well as to the EagleBurgmann Joint Venture. The Group employs almost 2,000 people in R&D-related functions and is steadily increasing the number of dedicated specialists in this area.