Freudenberg, a family business that's now global

With diverse businesses ranging from chemicals to automobile components, century-old German family company Freudenberg plans to expand investment in China for growth in a market that plays an increasingly important role in its global strategy.

The company reported record sales of 3.67 billion yuan ($580 million) in China last year, a 12.5 percent increase over 2010, at the same time its global figure rose 9.6 percent.

"The outstanding performance of our Chinese businesses was an essential factor in the above-average growth rate achieved by the entire Freudenberg Group," said Hanno D. Wentzler, the group's regional representative in China.

The group's global sales are still largely generated in Europe and North America, but the share from Asia increased to 16 percent last year, up from 12 percent in 2009.

Freudenberg's momentum in China continued this year as sales grew by 20 percent in the first quarter. "We expect 2012 to be a very solid year," Wentzler said.

"Of course we also feel the current softening of the economy - in the automotive sector and other industries - but we still believe in the medium and long-term success of our business ventures here in China," he said.

The group invested 357 million yuan in China last year, double the amount in 2010. Its investment in China from 2004 to 2011 totaled more than 1.8 billion yuan.

The company said that the investment will continue to increase in the coming years.

On May 7 Freudenberg broke ground on a new 36 million yuan plant in Chengdu that makes engine and cabin air filters for automobiles. The move is part of the company's strategy for western China, where it sees new growth opportunities.

International auto giants Volkswagen and Toyota both have joint venture factories in Chengdu, while Volvo also announced plans for production facilities in the southwestern city after it was acquired by China's Zhejiang Geely Holding Group.

Freudenberg estimates that the annual output of vehicles in Chengdu will increase to 3 million units by 2015 from 1.8 million last year.

The group said it also plans to invest 130 million yuan by 2014 to expand production in Yantai, Shandong province, where it makes chassis components and air springs for commercial vehicles.

In addition, a new production line to make conventional car batteries in Changchun is under construction. Built at a cost of tens of millions yuan, the new joint facility by Freudenberg and Japan's NOK will be operational by the end of this year.

Freudenberg is among the many foreign suppliers that are expanding quickly in China, as the enormous market shows great potential and their major client automakers have greatly increased production.

French company Valeo opened its 22nd factory in China earlier this month and expects to add four new plants within the next 12 months, moving toward the target to double its sales here by 2015.

German industrial giant Bosch Group said that it will maintain annual investment of 3 to 4 billion yuan until 2015 in China, its third-largest market worldwide.

While enhancing its presence in coastal areas, Bosch is also accelerating its expansion into the central and western regions in China.

hantianyang@chinadaily.com.cn