Despite the difficult industrial and financial environment, the company has posted impressive results and continues to invest in R&D for future growth
Freudenberg, the global technology group, performed well in the 2019 financial year in spite of the difficult economic and geopolitical market environment. At Rs 74,583 crore, sales in 2019 were at about the same level as in 2018 of Rs 76,235 crore. Freudenberg also performed strongly in India, with sales growing by 5.7% to Rs 2,533 crore. This rise is the result of continuous investments in existing and new projects. “We once again focussed heavily in our future, in machines, equipment acquisitions and, above all, in the three focus areas of our 2018-2020 strategic planning period, namely, mobility, digitalization and sustainability,” said Georg Graf, Freudenberg’s regional representative in India.
Freudenberg’s seven business groups in India have a total workforce of some 2,844 employees at around 50 locations – running six research and development centres and 16 production sites with state-of-the-art shop floors. In the 2019 financial year, Freudenberg conducted research and development activities to the tune of Rs 3,789 crore. That figure is equivalent to 5.1% of sales, which was 4.7% the previous year. The company measures the effectiveness of its research and development activities as the share of new products (those less than four years old) in total sales. This share globally rose to 34.7%.
Especially noteworthy are Freudenberg’s increasing investments and activities in e-mobility. Innovations from Freudenberg in India were showcased at the Auto Expo Component 2020. Klueber Lubrication, a part of the Freudenberg Group, for example, introduced a series of lubricants for electric vehicles. “We are very happy to be one of the first movers in the industry to have successfully solved the lubrication requirements for electric vehicles,” said Graf. As a reliable partner to its customers, the group is working hard on future-oriented innovations for all types of drives, including hybrids, fuel cells and internal combustion engines.
In a volatile environment, it is beneficial to be a broadly diversified company. Freudenberg reduced risk by strengthening its various business areas through additional acquisitions in 2019. One of many examples: At the beginning of 2019, Freudenberg Sealing Technologies increased its stake in XALT Energy, LLC to more than 50%. Among other products, the company headquartered in Michigan, USA, develops and produces lithium-ion technology solutions for heavy-duty mobility applications. The company has also taken its corporate citizenship seriously with its commitment to corporate social responsibility extending beyond the value chain.
In 2019, many group companies, sites and employees volunteered for small initiatives and complex projects. Its education and environment program, with a budget of Euro 14 million globally, has been a key element of its corporate citizenship activities since 2015. The goal is to provide people with access to education and employment and support environmental protection. In 2019, Freudenberg turned 170 and the Freudenberg Training Centre (FTC) in Nagapattinam completed 10 years of existence. The group celebrated these anniversaries by planting trees at the site in Nagapattinam and a ceremony involving students, local school principals, faculty members, business group representatives and global representatives. More than 700 students have been trained successfully at the FTC so far.
As regards the company’s outlook, Graf said, “Following the corona virus-related complete shutdown, our companies in India will work hard to reach normal operating levels again. Together with our colleagues, customers and partners we are doing our part to pave the way for long-term growth. We continue to provide world-class products made by the dedicated workforce to the Indian community aligned with our vision of long-term commitment and supporting the ‘Make in India’ initiative.” All things considered, Freudenberg expects the environment to remain challenging in the 2020 financial year. The economic and geopolitical uncertainties are unlikely to ease.
Against this backdrop, Freudenberg is planning cautiously for the coming year and expects business developments in the markets relevant for the group to be subdued. Freudenberg intends to continue investing in long-term projects. The mobility transformation, digitalization and an expansion in sustainable solutions will remain central components of the company’s strategy. Freudenberg has held business ties with companies in India for more than 90 years. Together with its partners, customers and research institutions, the Freudenberg Group develops leading-edge technologies and excellent products and services for about 40 markets and for thousands of applications: seals, vibration control components, technical textiles, filters, cleaning technologies and products, specialty chemicals and medical products.