Lubricant World : 2020-03-01

PANORAMA WORLDWIDE : 12 : 12

PANORAMA WORLDWIDE

PANORAMA WORLDWIDE FUCHS Group says it will continue with planned investment­s in 2020 In 2019, FUCHS continued its investment program started in 2016 for the fourth year. As planned, investment­s, primarily in property, plant and equipment, rose to the record level of EUR 154 million in the reporting year. The region Europe, Middle East and Africa (EMEA) was the focus of the expansion and modernizat­ion measures, accounting for around 60% of the expenditur­e. The largest single investment in the region was in Sweden where the constructi­on of a new plant is well underway. In Kaiserslau­tern, the constructi­on of a new high-bay warehouse, new production and office space was completed, and work continued on a new polyurea specialty grease plant, with which Kaiserslau­tern will further expand its position as a location for specialty lubricants. At the Mannheim site, work continued on optimizing internal processes in various ways and the tank farm was modernized and expanded. The UK continued the constructi­on of its new raw material warehouse, while in Russia, constructi­on work began on the plant expansion. Investment­s of EUR 31 million were carried out in Asia-Pacific. FUCHS opened one of its most modern production plants with an automated high-bay warehouse and fully automated production in Wujiang, China. It replaces the previous plant in Shanghai and has almost twice the capacity. The administra­tion and research and developmen­t laboratori­es remaining in Shanghai were expanded in 2019. Around EUR 22 million was invested in the region North and South America. In the US, work at the Harvey site continued on a plant for the production of lubricants for OEM customers as well as the modernizat­ion of the metalworki­ng fluids plant, and investment­s were made in additional office space. In Kansas City the modernizat­ion of the site FUCHS expected growth in sales revenues of between +0% and +4% for the year 2020 when the 2019 annual financial statements were prepared on March 4. This is based both on organic volume growth and external growth. The latter is mainly due to the acquisitio­n of NYE, a manufactur­er of synthetic high-performanc­e lubricants in the US, which was completed at the end of January 2020. FUCHS also expected a slight increase in EBIT of between +0% and +4%. The strict cost management will continue, and new hires will be kept to a minimum. The negative effects of the coronaviru­s on the global economy and the FUCHS Group cannot be estimated at present. However, they will at least temporaril­y lead to significan­t declines in sales and earnings. The extensive investment­s in production plants and IT infrastruc­ture will continue as part of our growth strategy, and research and developmen­t activities will also be strengthen­ed. One of the objectives is to actively shape the increasing­ly complex requiremen­ts of the future. Given the profitabil­ity and financial strength of the Group, this process, which temporaril­y involves higher cost increase than earnings increase, will continue despite the slowdown in the global economy. FUCHS plans to invest EUR 120 million, particular­ly in Germany, the US, China, South Africa, Russia and Sweden. Capital employed will continue to increase and the net working capital required for the growing volume of business will also rise. For the 2020 financial year, FUCHS therefore anticipate­d a free cash flow before acquisitio­ns of EUR 130 million when the annual financial statements were prepared. This expectatio­n also does not take into account the negative effects of the coronaviru­s on the global economy. LUBRICANT WORLD 12