SFN to set up R&D cen­tre at new Chen­nai plant

To be a cen­tre of ex­cel­lence for dampers for Asia Pa­cific

Auto components India - - COVER STORY - Story by: Bhar­gav TS & Sricha­ran R

Sigma Freuden­berg NOK (SFN), part of Ger­many-head­quar­ted Freuden­berg Group will be set­ting up a new R&D cen­tre at its up­com­ing Chen­nai pro­duc­tion project. The new fa­cil­ity will also act as a Cen­tre of Ex­cel­lence (CoE) for dampers, for the Asia Pa­cific re­gion, ex­clud­ing North China. Freuden­berg is set­ting up the new pro­duc­tion unit at Val­lam-Vada­gal In­dus­trial Park near Chen­nai at an ini­tial in­vest­ment of Rs 210 crore to make seal­ing prod­ucts for au­to­mo­tive and other sec­tors. The 13-acre site is ex­pected to com­mence op­er­a­tions from the first quar­ter of 2019. San­jib Das, CEO and Di­rec­tor, SIGMA Freuden­berg NOK Board, told Au­toCom­po­nentsIn­dia, “The new R&D cen­tre will come up along with our Chen­nai plant. We have one such fa­cil­ity at our Chandi­garh plant. For the new R&D cen­tre we will be in­vest­ing Rs 5 crore in the be­gin­ning and we will also add more equip­ments for test­ing axle and en­gine com­po­nents. The place will also be the cen­tre of ex­cel­lence for In­dia as a re­gion for com­po­nents that go into en­gine and trans­mis­sion axle.”

Freuden­berg feels that in­no­va­tion is key to long-term cor­po­rate suc­cess. Dur­ing 2017, the Group in­vested on in­no­va­tion and con­ducted re­search and devel­op­ment ac­tiv­i­ties for Rs 3,157 crore. In the pre­vi­ous year it spent Rs 2,764 crore. On the new Chen­nai plant, he said, “By the sec­ond half of 2019 the Chen­nai plant will be com­mis­sioned and by end of 2019 we ex­pect the ramp­ing up to start. Com­mer­cial pro­duc­tion will be­gin by early 2020. The plant will be ca­pa­ble for man­u­fac­tur­ing the fu­ture tech­nol­ogy prod­ucts. We are in­vest­ing for the fu­ture here. The Chandi­garh plant will copy all the bench­marks that we do at our new plant and it will be like phase 2 for us. We do not want to miss any­thing in the up­com­ing plant. From the Chen­nai plant, we will reach out to all our South-based cus­tomers,” Das said.

The new plant will have mould­ing ma­chine, mixer ma­chine, which are set at a con­trolled tem­per­a­ture and hu­mid­ity in­side the man­u­fac­tur­ing plant. The plant will also man­u­fac­ture polyurethane seals. “We have been ad­vis­ing and pro­mot­ing polyurethane prod­ucts in In­dia ow­ing to its ad­van­tages. In cer­tain ap­pli­ca­tions, only polyurethane can be used be­cause of the na­ture of the ap­pli­ca­tion. Be­cause of the crit­i­cal­ity of the sub­stance and as it is very del­i­cate to be han­dled we never lo­calised it. Now, with the Chen­nai plant com­ing up with high stan­dards and new gen­er­a­tion equip­ment, we will be man­u­fac­tur­ing it,” he said.

Polyurethane can be used in var­i­ous ap­pli­ca­tions and the com­pany cur­rently fo­cuses on big hy­draulic sys­tems. The seal is also used in au­to­mo­tive in­dus­try in engines, trans­mis­sions, sus­pen­sions etc. The seals are put up to re­duce the fric­tion which helps the ma­chine to work

bet­ter and have longer life. The new plant is to cater to the needs of its cus­tomers in the South­ern re­gion and is not look­ing for ex­ports.

“From the eco­nomic point of view ev­ery­body believes that in the next 8-10 years In­dia is go­ing to have sus­tain­able growth. So, the coun­try will be­come a fo­cus for in­vest­ments. If you look at Freuden­berg, our mar­ket share in Europe and Amer­ica are ma­tured. But in In­dia, China and South East Asia it is quite low. This also helps to bring in fur­ther in­vest­ments, as we al­ways be­lieve in lo­cal for lo­cal. Mak­ing it lo­cally does not re­strict us from ex­port­ing,” Das said.

He said the Chen­nai plant will be tech­no­log­i­cally dif­fer­ent as it will have the en­tire in­jec­tion mould­ing fa­cil­ity while the Chandi­garh fa­cil­ity will have trans­fer mould­ing. “The Chen­nai plant will fol­low ‘Freuden­berg Safety Stan­dard 5 (FSS 5), which de­notes ‘Safety of Ma­chines and Pro­duc­tion Lines’. We are in­vest­ing a lot on it. The safety fea­ture is not just about mak­ing the sys­tem safe but also about all the prob­a­bil­ity that can be in an equip­ment to cause even the small­est in­jury and elim­i­nate that. The next will be the type of equip­ment that we bring in,” he said.

FSS 5 aims to achieve ad­e­quate tech­ni­cal ma­chine safety when pro­vid­ing and op­er­at­ing ma­chin­ery. This ad­e­quate tech­ni­cal ma­chine safety al­lows for the state of the art which is ori­ented to the Ma­chine Direc­tive in Europe and the min­i­mum re­quire­ments for ma­chine safety in USA laid down in the OSHA (Oc­cu­pa­tional Safety and Health Act 1970).

An­other ma­jor fea­ture of the Chen­nai fa­cil­ity is the coat­ing ma­chine, which we call it as the bond­ing ma­chine. And this equip­ment will sort of re­cy­cle the vapour to wa­ter for wash­ing and sorts it out to col­lect ev­ery­thing. In Chandi­garh, we have the equip­ment and it has a huge ex­haust that leads out to a wa­ter cham­ber and gets col­lected some­where else. But, at the new fa­cil­ity in Chen­nai, it will be a mo­bile equip­ment. You can put it any­where and use it,” he said.

He also added that there will be a lit­tle dif­fer­ence in the cost and said that the ma­te­ri­als they use, the prod­ucts and the tech­nol­ogy will re­main the same, and this por­tion of the cost will re­main the same. “There are taxes be­tween the coun­tries and that plays a ma­jor role. In In­dia, as a thumb rule, cost would be low, but it will be just man­u­fac­tur­ing cost.”

On pass­ing the ben­e­fits to their cus­tomer, Das said, “Maybe not ini­tially, be­cause we have in­vested a lot to bring th­ese prod­ucts to In­dia. The in­vest­ments have to re­turn from some­where and that will come from the dif­fer­en­tial cost for some pe­riod of time. When that comes to a level, then we will do it. Lo­cal­i­sa­tion will al­ways give ben­e­fits to the cus­tomer and now it de­pends on how the cus­tomer looks at it. For ex­am­ple, a cus­tomer might see this as a ben­e­fit be­cause ear­lier the fi­nal prod­uct was from Europe. Now, only the ma­te­rial will be from there and the value ad­di­tion hap­pens in In­dia. There will be saving in terms of the sup­ply chain, lo­gis­tics cost and taxes.”

The com­pany will be bring­ing new prod­ucts to In­dia like static seals and O-rings. All Freuden­berg’s prod­ucts are Euro 6-com­pli­ant and they are also work­ing with the cus­tomers who are not in Euro 6 and help­ing them move to the new changes. The com­pany also has its pres­ence in the e-mo­bil­ity seg­ments and show­cased it at the New Delhi Auto Expo. “We have been in the e-mo­bil­ity seg­ment since its in­cep­tion. To­day we have ev­ery so­lu­tion that an EV needs from the seal­ing point of view,” he con­cluded.

Freuden­berg’s Re­gional Cor­po­rate Cen­tre in Ban­ga­lore acts as a key in­ter­me­di­ary and shares im­por­tant know-how across op­er­at­ing or­gan­i­sa­tions in In­dia. Freuden­berg’s busi­ness per­for­mance was strong in In­dia, with sales grow­ing by 25% to Rs 2,768 crore in 2017.

SFN of­fers wide range of seal­ings

San­jib Das, CEO and Di­rec­tor, SIGMA Freuden­berg NOK Board

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