The Freudenberg Group continued its profitable growth in 2016 despite challenging conditions in multiple market segments and several world regions. The global technology leader achieved sales of €8.6 billion or CNY 63,127 million, based on the pro-rata consolidation of joint ventures. That represents an increase of 13.5 percent over 2015. Freudenberg also continued its positive business development in Greater China, growing sales by over 20 percent to CNY 7.2 billion last year. The rise in sales is attributable to acquisitions, the market success of the Group's innovative products as well as its high level of customer orientation and flexibility. The two key acquisitions of Japan Vilene Company and the remaining shares in Vibracoustic strengthen Freudenberg's footprint in the country and underline its long-term commitment to the local market.
"We are on track to become one of the most innovative broadly diversified global technology groups," said Dr. Mohsen Sohi, Freudenberg Group CEO, at the press conference in Beijing. "We remain committed to China, as shown by our continuous investments and the support we offer to China's goals as outlined in the current Five-Year Plan and the China Manufacturing 2025 initiative. In the past five years alone, we have invested CNY 1.2 billion in China."
In China, Freudenberg's more than 70 sites generated sales of CNY 7.2 billion in 2016, an improvement of over 20 percent compared to the previous year. More than 6,300 employees now work for the Group in China, including at 24 production sites with state-of-the-art shop-floors, more than half of which are equipped with their own on-site R&D. The increase in sales and employees can be attributed to a large extent to the acquisitions of Japan Vilene Company and all the shares in Vibracoustic, both of which operate production, sales and service sites in China.
"In 2016, Freudenberg invested CNY 282 million in China", said Bettina Schoen-Behanzin, Freudenberg Regional Representative Asia. "Investments were made across the board, at facilities located all over China." Looking ahead, she added that "Freudenberg will continue to invest in China to help meet the objectives of China Manufacturing 2025 and offer support to the country's long-term goal of becoming a world leader in science and technology."
The German Group has adopted a long-term planning process, as part of which it has identified six key industries of the future. They are: Transportation, Health, Food, Energy, Construction and Chemistry – all fields with strong growth potential in China.
Transportation and mobility, including new energy vehicles (NEVs), are a central component of China Manufacturing 2025, and Freudenberg is actively supporting the Chinese industry in meeting its objectives.
Freudenberg supports China's new mobility targets
China is leading the shift in what can be described as the biggest change in mobility since the invention of the automobile in 1886. By 2020, the country plans to produce two million NEVs annually. China recently overtook the US as the leading market for new energy vehicles, and is now the global market leader. "The world is changing and we are keeping a very close eye on these changes. That is why 'new mobility' features prominently in our strategy," explains Dr. Mohsen Sohi. With up to 300 different Freudenberg components found in any given car model, it is not surprising that the German technology group is already actively working with its customers to address the challenges that arise from this mobility shift.
Freudenberg's solutions for tomorrow's mobility challenges
In 2016, Freudenberg generated some 40 percent of total sales from its activities in the automotive industry. Already today, products are being used in hybrid and electric vehicles. Freudenberg's Safety Separator, for instance, keeps the plus and minus poles in batteries permanently separated. The wafer-thin yet extremely durable nonwoven separator, equipped with a functional ceramic material impregnation, minimizes the risk of short circuits or battery fires while allowing the current to flow freely. It also extends service life.
In addition, Freudenberg's broad-ranging sealing technology portfolio increases useful lifetime and improves thermal management. The Group's filters ensure clean cabin air and protect the health of the passengers in polluted environments. In addition, cars make less noise thanks to advanced anti-vibration technology, while specialty lubricants make them more efficient.
Freudenberg already offers all of these solutions, and is working with its customers to apply its expertise to the challenges of tomorrow.
As a values-oriented technology company, success for Freudenberg means not only being financially successful but also taking responsibility for society. Corporate citizenship goes beyond the value chain. The objective of the "e²" (education and environment) international program is to give people access to education and work and to encourage environmental protection. To that end Freudenberg is making a total of €12 million available over 6 years. From the launch of the initiative in the summer of 2015 up to the end of 2016, funding in the amount of about €2.6 million was approved for 36 projects, from small actions to major education programs in the direct neighborhood of Freudenberg sites.
As part of its e² program, the Freudenberg Group and its local employees are supporting a number of initiatives in China, including robotics classes for underprivileged children at Shanghai's Golden Sun School, tree planting in Shanghai's JinZe Reservoir to help conserve the water source in Qingpu and providing children at Suzhou's Qixin primary school with access to discarded computers as part of a "Green IT Classroom" campaign, among others.