FUCHS CHINA Positioned for Profitable Growth

14.05.2018

FUCHS CHINA Positioned for Profitable Growth

In 1988, FUCHS China was launched with only 30 employees generating sales revenues of €154,000. 30 years later, FUCHS LUBRICANTS (CHINA) represents the second largest FUCHS corporation within the FUCHS GROUP following FUCHS SCHMIERSTOFFE. A total of 365 employees generate sales revenues of €454 million.

"With more than 60 percent, the China business makes a crucial contribution to sales revenues in the Asia-Pacific, Africa region – and our Chinese customers also expand abroad. With our global network we will be able to supply them there, too.”

Klaus Hartig, Executive Vice President East Asia

Early on, Dr. Manfred Fuchs, Chairman of the FUCHS GROUP’s Executive Board at the time, realized the significance of the business with Asia for his company. In 1985, he signed a joint venture agreement with a Chinese company and acquired the first plant in Yingkou (Province Liaoning) in 1988. He was a real pioneer. The Mannheim-based company was the first company in the State of Baden-Wuerttemberg operating production facilities in China.

By the mid-nineties, FUCHS had elaborated a strategy for the systematic expansion in the Asia-Pacific region. Expansion was based on positive organic development and on partnerships as part of joint ventures. In 1996, another production site was completed in Shanghai, followed by a third plant in Hefei in 1998. By 2003, the FUCHS GROUP owned 100 percent of all its Chinese corporations.

On October 17, 2008, the Mannheim based lubricant manufacturer not only celebrated 20 years of continuous operation in China but also the inauguration of the new company headquarters in Shanghai for which the company had invested about €10 million. In addition to a modularly expandable production, the site, which covers 42,000 square meters, comprises a research and development center with 40 employees. Production in Hefei was shut down.

FUCHS plant in Yingkou, China

Another milestone in the success story in China was the inauguration of the new FUCHS plant in an industrial area of Yingkou on October 28, 2013. The old plant did not offer any more space for expansion. In less than two years a highly automated production plant was erected on a surface area of about 80,000 square meters in the northeast of China, 600 km east of Beijing. €24 million were invested in the new site. In spite of the significant higher capacity it can be operated with the same number of employees. The plant manufactures around 2,000 products for diverse applications. Yingkou mainly supplies the north of China as well as the automotive, mining and steel industries.

The plant supplies customers across all of China with greases and other specialties. In 2013, both Chinese subsidiaries jointly generated sales revenues of €254 million, about 13 percent of the GROUP’s revenues. In 2008, the volume was only half the size 6 percent.

It soon turned out that modifications in Shanghai‘s city planning brought the Shanghai plant to its limits ultimately triggering the decision for a new plant. “Currently, a new plant with eight fully automated filling lines, 31 mixing stations and 55 tanks with capacities from 60 to 500 cubic meters is under construction in Wujiang, a city district of Suzhou in the Province Jiangsu. The new plant raised investments of €36 million. The output capacity during phase I will amount to 100,000 tons annually, almost twice the output of the Shanghai plant. The high bay warehouse will have a capacity of 11,000 pallets,” as Qingping Zhu, CEO of the FUCHS LUBRICANTS (CHINA) LTD.  since 2009, outlines the plans. “By the second quarter of 2019, the new plant will ramp up all its production activities“.

The factory in Wujiang will become operational by the second quarter of 2019.

“Our customers are international companies but also Chinese corporations which increasingly opt for high-quality products and have become very demanding in terms of goods delivery and product management. This plays in our cards and our new plant in Wujiang is another important step for improving our competitive edge."

Qingping Zhu, Managing Director FUCHS LUBRICANTS (CHINA) LTD.

The plant will produce automotive lubricants for OEM manufacturers and dealerships. The portfolio for the industrial sector includes metal working fluids, corrosion preventives, quenching oils and products for lubricant management services.

Zhu is convinced about the further growth potential for lubricants in China. “China is the largest vehicle manufacturer worldwide, has the second largest population of road vehicles, and leads the industry in e-mobility, wind power, steel, cement and coal mining. Against this backdrop, lubricants are definitely among the most important industrial products,” he justifies his optimism. “Our customers are international companies but also Chinese corporations which increasingly opt for high-quality products and have become very demanding in terms of goods delivery and product management. This plays in our cards and our new plant in Wujiang is another important step for improving our competitive edge. By the year 2020, we aspire to raise sales revenues to €640 million”.

“China is the largest lubricant market worldwide and still growing. During the past 30 years FUCHS has written a true success story in China and the country has become one of our three most important markets. On the occasion of the 30-year anniversary, I would like to send my cordial congratulations to the outstanding team of FUCHS CHINA – and I am convinced that numerous chapters in the success story will follow.”

Dr. Timo Reister, Member of the Executive Board of FUCHS PETROLUB
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