Freudenberg to invest US$30.6m at Chennai facility

The German conglomerate, which employs around 2,688 associates at 50 locations in India, reported a 25 per cent rise in sales from the country to more than US$407 million during 2017

May 31, 2018

The group, which produces housewares and cleaning products, automobile parts, textiles, building materials, and telecommunication equipment, employs around 2,680 associates across seven businesses at 50 locations in India

In 2017, the German group recorded a more than 18 per cent rise in global sales to US$10 billion, backed by strong contribution of the Indian operation which recorded a 25 per cent jump in sales to more than US$407 million

The group’s Indian assets include six research and development (R&D) centers and 14 production sites with state-of-the-art shop floors, among others; The rise is sales was aided by continuous investments in existing and new projects

Freudenberg says that the new facility in Chennai is an important step to underline its commitment to 'Make in India'; It aims to balance its portfolio further towards generating one-third of sales each in Asia, North America and Europe

German conglomerate Freudenberg Group announced on May 31st that it would invest around US$30.6 million at manufacturing plant in Chennai. The group, which produces housewares and cleaning products, automobile parts, textiles, building materials, and telecommunication equipment, employs around 2,680 associates across seven businesses at 50 locations in India. The group’s Indian assets include six research and development (R&D) centers and 14 production sites with state-of-the-art shop floors, among others. In 2017, the German group recorded a more than 18 per cent rise in global sales to US$10 billion, backed by strong contribution of the Indian operation which recorded a 25 per cent jump in sales to more than US$407 million. The company said that the rise is sales was aided by continuous investments in existing and new projects, including at the Chennai plant.

“Our new facility in Chennai is an important next step – not only to grow, but also to underline our long-term commitment to the local market and to support the ‘Make in India’ initiative,” said Georg Graf, Freudenberg Regional Representative India. “These important decisions contribute to the sustainable growth of the entire Group. Both, operationally and strategically,” Mr Graf added. The company aims to balance its portfolio further towards generating one-third of sales each in Asia, North America and Europe. “The Indian market plays a key role in our existing and future operations, and our diversified and innovative portfolio caters to the demands of India’s industry,” said Mr Graf. During 2017, Freudenberg invested more than ever before in innovation and conducted research and development activities in the amount of over US$460 million, compared with around US$400 million in 2016.

The growing Indian consumer base has encouraged a cross section of foreign companies to invest in manufacturing operations in the country. Additionally, buoyed by the local human capital and other favourable resources, companies such as Freudenberg are investing in India to not just cater to the local market, but also to export from the country. The growing foreign manufacturing base in India has helped to grow India’s participation in world trade and increase domestic value-added content in India’s exports. Following a dip in exports during financial years 2014-15 and 2015-16, India’s merchandise exports have been on a growth trajectory over the past two years, reaching US$303.4 billion in 2017-18. This growth has also received support from Government of India’s initiatives such as Make in India, Skill India and Startup India that aimed at boosting indigenous capabilities and resources.

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