Klber Lubrication and Chem-Trend, two business units of Freudenberg Chemical Specialties KG, will produce specialty lubricants and release agents at a new plant Freudenberg opened on Thursday in Qingpu, a district of Shanghai, China.
The company said that with an investment of 19 million (U.S. $29 million), the new Freudenberg Chemical Specialties plant will be the groups most modern facility. The site has a total area of more than 30,000 square meters. The company has used about one third of the land for buildings to house offices, warehouses and logistics facilities, labs and production halls, recreation rooms and supply services.
The plant is one of the largest in the Freudenberg Chemical Specialties production plant alliance and is designed for a maximum annual capacity of almost 13,000 metric tons of lubricants and release agents. The site layout includes an optional reserve of almost 20,000 square meters, which can be used to meet future increases in demand by Chinese customers.
We were running operations in Shanghai before we decided to build the new plant and found nearly perfect conditions in the Qingpu industry zone, Freudenberg Chemical Specialties KG spokesman Christian Zins told Lube Report. Klber Lubrication will manufacture a range of lubricants, while Chem-Trend is focused on release agents manufacturing mainly for the automotive and general industries. Klber Lubrication Munchen KG is headquartered in Munich, Germany, and Chem-Trend is based in Howell, Mich.
Klber Lubrication and Chem-Trend now employ about 170 associates in China, most of them based at the Qingpu site. According to Freudenberg, medium-term plans envisage an increase in headcount to 200. Most of the new jobs at both companies have been in production, logistics, technology and labs.
According to Freudenberg, particularly strong growth sectors in China include the automotive, textile, plastics, shoe, tire and wood processing industries as well as bearing technology. China is one of the few lubricant markets in the world which, in contrast to the almost stagnating global market, continues on its growth path, the company said in its announcement. Total consumption rose by almost 50 percent between 1995 and 2005. Annual consumption of all types of lubricants in China is between 4 and 4.5 million metric tons, the second largest consumption worldwide.
High economic growth in China is an especially important factor in terms of meeting our long-term strategic and economic goals, Hanno Wentzler, the Freudenberg Group regional representative in China and president and chief executive officer of the Freudenberg Chemical Specialties Management Board, said at a press conference in Qingpu on March 6. Demand for high-quality lubricants and release agents have been rising for years in line with growth in major key industries in China.
The Group and its partners have now invested about 130 million ($199.3 million) in buildings, new production facilities and modernized lines, environmental protection and quality assurance since 2000. Group sales in China have more than doubled in the period, to about 340 million ($521.3 million).
To be near the regional customers, the Freudenberg Group said it will also invest in other projects in China. It is in the midst of setting up a new company in Yantai for vibration control technology which will produce air springs for trucks, buses and trailers. At the Suzhou location, the company is investing in a new line which will produce headliners for almost all types of automobiles commonly available in China from August 2008.
Freudenberg and its partners established their first subsidiaries in China more than 25 years ago. Today the company employs 3,600 associates at 14 production facilities and 26 sales offices in the country. The Freudenberg Groups joint venture partner NOK operates an additional seven production plants and employs an additional 5,200 people.