Fuchs Invests as Earnings Grow


Lubricants supplier Fuchs Petrolub Group AG reported strong earnings for the first half of 2008, and outlined 70 million (U.S. $104.3 million) in investments this year. The investments will expand research and development, strengthen its specialty business, and create additional capacities in Brazil, China and India.

Fuchs Petrolub last week reported net profits of 65.1 million (U.S. $99.7 million) for the first six months of 2008, up 11.9 percent from 58.2 million during the first half of 2007. Sales revenue for the first half of 2008 reached 718.7 million ($1.1 billion), up 4.7 percent from 686.3 million in the year earlier period.

The company said substantial raw material prices increases have made price adjustments necessary, with a subsequent increase in sales revenues. According to Fuchs, reduced borrowing of interest-bearing capital led to an improved financial result.

For the earnings before interest and tax (EBIT), Fuchs aims to achieve a slight increase over the previous years result, despite higher raw material costs, stress and strains from currencies, and the emerging slow-down of overall economic growth, the company also said.

Fuchs Petrolub said it plans to open a new lubricants plan in Shanghai this month. Not only does the new location represent the headquarters of Fuchs activities in China, it will also be the center of the Fuchs Groups research and development in Asia, Fuchs said.

In March, Fuchs acquired a 95-years lease for 40,000 square meters of industrial land in India, where it planned to begin building a new lubricants plant for its rapidly growing, wholly owned Fuchs Lubricants (India) Pvt. Ltd. subsidiary. On Aug. 6 the company said it anticipates being in the first stages of construction at the end of this year for a plant with laboratory and office space.

On Aug. 6 the company also broke ground in Kaiserslautern, Germany for the global headquarters of its Fuchs Lubritech subsidiary. The 20 million project aims to keep pace with growth in international demand for specialty lubricants. For the project, in addition to the existing area of 22,500 square meters, Fuchs Lubritech is acquiring expansion space of 33,500 square meters and also has an option on a further 25,000 square meters. The expansion is to add 25 additional jobs to 180 existing employees.

Last week, Fuchs also outlined planned construction projects at its home site in Mannheim, Germany, which has more than 600 employees. Fuchs Europe Schmierstoffe, another Fuchs Petrolub subsidiary, will expand its main plant through an investment of more than 20 million. Fuchs purchased a site of almost 12,000 square meters on Aug. 1 from Rohrenlager Mannheim GmbH for the construction project. The purchase gives Fuchs more than 106,000 square meters on the Frisenheim Island.

The key focus of the Fuchs Europe Schmierstoffe construction project will be the building of a new technology and sales and marketing center with new office and laboratory space, as well as an increased capacity of test rigs, the company said. In addition to this, previously separate parts of the site will be connected to each other.

The core of the Mannheim sites technology center will be a new laboratory building, which will create additional capacity in the metalworking fluids field. The new laboratory building will include space for research activities in metalworking, corrosion protection, advance development, quality control, technical service and know-how transfer. The new building will be near a 6 million laboratory space created in 2003 for automotive lubricants and industrial oils.

The company will enlarge the test bench area and increase capacities to expand development of new products. Fuchs said the existing test bench was constructed in 2003, focusing on development of future lubricants.

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