Freudenberg to remain focussed on 3 business areas amid subdued short-term outlook

G Balachandar Chennai | Updated on May 21, 2020

Germany-based €9.5-billion global technology group Freudenberg will remain focussed on investing in long-term projects even as the Covid-19 outbreak is expected to hit its positive growth curve in India.

The company, which has significantly large operations in India with a total workforce of about 2,900 people across six R&D centres and 16 production sites in India, ended the calendar year 2019 with revenue of ₹2,533 crore (€321 million), up about 6 per cent, supported by continuous investments in existing and new projects.

“In a volatile environment, it is beneficial to be a broadly-diversified company. Freudenberg reduced the risk by strengthening the various business areas. The company’s goal has always been a balanced portfolio of cyclical and non-cyclical businesses,” Georg Graf, Freudenberg’s Regional Representative in India told BusinessLine.

Our automotive-focussed business got some headwind during CY19 due to the slowdown and reduced output in this sector. Other businesses focusing on general industry or non-automotive segments were growing ahead of the market. The strategy of producing in each of our regions for the region primarily has also been a strong reason for independent sustenance, he added.

However, the company expects demand to be affected in all important markets, in particular, the automotive industry and general industry due to the spread of the coronavirus and containment measures. This has not only impaired demand but also production, the procurement market and the supply chain. The impact will depend on how long the crisis lasts.

In view of this, Freudenberg expects the environment to remain challenging in 2020 and it feels that the economic and geo-political uncertainties are unlikely to ease. Against this backdrop, it 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. Mobility, digitalisation and sustainability will remain key focus areas of our strategy,” said Graf.

Meanwhile, during the current fight against Covid-19, Freudenberg offers important components such as complex silicone hoses for lung ventilation devices, which are already in use.

“Freudenberg’s new, sensor-based measuring method called Helix iMC for permanent quality control, leaves the global industry standard far behind and also reduces silicone waste by 25 per cent,” he said.

To a question on the staff front, Graf said there was no need to panic and the company was taking all necessary measures to get through this crisis.

Published on May 21, 2020

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