Text: Anusha B
The Germany-based Freudenberg Group offers its customers technically challenging product solutions and services. The company supplies seals, vibration control technology components, filters, nonwovens, release agents and lubricants to almost all car manufacturers in the world. It is adding customers from other industries, such as mechanical and plant engineering, energy, chemistry, oil and gas or medical and pharmaceutical.
Freudenberg invests about 4.2% of its turnover in Research & Development (R&D) to develop and sell more new products. Over 26% of its total sales are of such technologically-advanced new products developed during the last 4 years. The past 5 years’ strategic data shows that the company’s R&D spend has increased by 11%. Proportionally, there is a 7% increase in the number of employees too.
Freudenberg’s 4 state-of-the-art R&D centres in India with futuristic labs and expert teams steer the company forward despite the challenges in the automotive industry. About the R&D investments in India, Dr Jorg Matthias Groffman, MD & CFO, Freudenbers Regional Representative India said, “At our sites in Mysore, Pune and Mohali, the R&D facilities develop products for the needs of the local customers. It is a part of our group strategy to make globally developed innovations suitable for regional use. Also the automotive industry contributes 26% of our global diversified business and there is an uptick in the prospects of the same. Unless we navigate our innovations it is impossible to achieve sustainability. R&D should no more be termed as expenses but a necessity.”
The group spent Rs 2237 crore on R&D in 2015 against Rs 2183 crore in the previous year. The company’s global sales against the preceding fiscal grew by 7.6% to Rs 53,750 crore. The business in India increased 3.7% to Rs 1497 crore, in spite of the challenging conditions. Based on the current data the company anticipates a growth of 7-10% in sales in the current fiscal in India, and between 1% and 3% globally.
Freudenberg’s investment in India last year was Rs 68 crore. The investments were made to upgrade and expand the R&D and manufacturing at almost all business groups. The major portion of the investment went to the state-of-the-art production site, labs and warehouse of the specialty chemicals factory in Mysore which was inaugurated in August 2015. The Mysore facility is owned by Kluber Lubrication India which manufactures specialty lubricating oils, greases, pastes and release agents under the name of Chem-Trend, OKS and Kluber Lubrication brands.
“In the process of meeting its commitment to India, the company, through its joint venture, manufactures sealing technologies for the global market. Together with our partners, we will expand our presence and continue to invest in India. We have high expectations as we have significantly invested in the recent past to prepare Freudenberg in India for the future,” he said.
As part of its Corporate Social Responsibility (CSR), Freudenberg started a training centre in Nagapattinam. The centre’s curriculum is being expanded adding electrical course from this year. The number of female students gets increased. “We are continuing the journey we started almost 10 years ago in spite of several huddles and challenges. But the happy face of the young professionals top gears us and we are contented with the right track taken. The corporate houses have to invest 2% in CSR. We do not want to pull the reins back with 2% and every company depending on their capabilities can contribute to the society. We continue to give our part in every region,” Groffman said. ACI
