SFN to set up R&D centre at new Chennai plant
To be a centre of excellence for dampers for Asia Pacific
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