— Dr. Jörg Matthias Grossmann, Regional Representative, India, and Executive Vice President and Chief Financial Officer, Freudenberg Chemical Specialties KG

Freudenberg of Germany is a family owned group of companies with 16 business verticals operating in various markets and in various sectors of industry, such as, automotive, mechanical and plant engineering, textile and clothing, construction, mining and heavy industry, energy, chemical, and oil and gas among others. Dr. Jörg Matthias Grossmann, in an email interaction with Prashant C. Trikannad, discusses Freudenberg's growth strategy in India.

What role do you envisage for Freudenberg Group in the proposed investment of $1 trillion in the 12th Five-Year Plan starting April 2012?
We understand that the upcoming five-year plan will have a strong focus on the macroeconomic development in India. Investments aim towards the infrastructure, the energy and raw material sector, manufacturing and general industry, construction, transportation, life sciences, the urban sector, public welfare, and rural development. As Freudenberg offers a broad portfolio of products and solutions, serving manifold industries and also parts of the consumer market, we see a lot of opportunities for our companies, especially in the areas of manufacturing, construction, heavy industry, transportation and mobility, life sciences, home care, and other market segments.

Our current business strategy for India regards both the macroeconomic framework and the valid megatrends in India. We value the five-year plan as a kind of guideline, supporting us in shaping our business strategy to meet both the demands of our customers in the market segments we serve and to participate in the growth triggered by the development targets of the five-year plan.

What is your outlook for Indian infrastructure for the next one decade? Which key sectors is Freudenberg looking to consolidate growth?
Since years we see constant, and partially also, rapid improvements in the country's infrastructure. One of the major goals of the Indian government is to further reduce poverty. Latest estimates say that the share of the population living below the 'poverty line' has declined by over 8 per cent almost in the last decade. Rural and urban development, increased employment and livelihood quotas therefore are of growing importance. A developed infrastructure is one prerequisite to achieve these ambitious goals.

In the last year of the 11th Five- Year Plan the overall investment in the entire infrastructure increased to approximately 8 per cent of the Indian GDP. The upcoming development plan aims to further accelerate the infrastructure development, also by encouraging PPP based investments. This bears many opportunities for Freudenberg companies, as many of them offer industry leading products and solutions, supporting the modernisation and further development of the Indian infrastructure.

In the past the Indian companies have shown themselves to be motors of growth for the Freudenberg Group. The Indian market is important to the group and therefore the Freudenberg Group is continually expanding its activities in India. In addition to oil and gas, mobility and wind energy are Freudenberg's main key sectors. Freudenberg's Indian companies and partnerships are also represented in both of these sectors.

Can you elaborate on Freudenberg's long-term commitment to India?
Freudenberg is active in India at 30 plants in 11 cities and has a workforce of more than 2,300 associates. Freudenberg has held business ties with customers and partners in India for nearly 100 years.

In general, after more than 160 years, the Freudenberg Group continues to be a wholly-owned family enterprise. We strongly believe that our long-term business orientation is a major strength that benefits our customers and partners. Whilst we are not averse to reasonable risks, financial prudence and solidity will continue to determine the scope and speed of our strategic development.

Freudenberg has a long and successful tradition of worldwide cooperation, alliances and partnerships which enable us to better serve our customers and strengthen our competitive position.

Are you concerned by the slow pace of infrastructure development, particularly in light of corruption scandals and the anti-corruption movement?
We only can state what principles we as Freudenberg adhere to. As a family company we strive for the highest standards of personal behaviour. Fairness and integrity guide our conduct amongst ourselves, towards our business partners, and the general public. This is one essential cornerstone of our business culture and is setting the framework for the way we act today and also will act in the future.

Given Freudenberg's strong presence across key industry verticals, what would you like to see the government do to repose confidence in foreign investors?
We have great confidence in the Indian authorities, in the Indian people, and our business partners here. Our longstanding business ties with India, lasting for almost 100 years, evidence this. We do not comment and we do not advice on general political or social issues. We concentrate on issues which are relevant for Freudenberg companies and the group's development as a whole.

Which among the group's industry verticals in India are likely to see greater investment in coming years?
The Freudenberg Group is a highly- diversified company and therefore focuses on strengthening and consistently developing all of its 16 business groups.

Of particular importance, from an Indian perspective, are the investments in infrastructure, the expansion of the railway network, the increase in the use of wind energy to generate electricity, as well as the growth in the automotive and mobility industry.

Freudenberg recently entered the Indian electrical vehicles and wind energy sectors. What are the new developments in these areas?
Electrical vehicles: A special coating for battery separators from Freudenberg Nonwovens helps to prevent possible short circuits in lithium-ion batteries, which is expected to make e-mobility safer. Freudenberg has developed a separator that increases the intrinsic safety of battery cells and thus helps to prevent possible explosions. For this purpose, a wafer-thin polyester fabric is coated with a paste. The product is a result of indigenous innovation at the company's R&D facilities worldwide.

Using our extensive network of knowledge, as well as the experience of group companies across the world, Freudenberg develops separators, seals, filter-systems and mechatronics solutions based on flexible printed circuits for lithiumion batteries. As a result, Freudenberg is one of the few companies worldwide to offer such a comprehensive range of components for this technology.

Apart from the separators, Freudenberg products for electric cars include Simmerrings, flat seals and O-rings. The temperatures in lithium-ion batteries used in such vehicles are high, making cooling especially important. Freudenberg has developed special seal materials for the various coolants that may be used. In addition, lithium-ion batteries consist of a package of cells for which Freudenberg provides frame seals. For the connection of batteries to vehicle systems, Freudenberg has developed elastic components that replace rigid screwed joints making the connections safer and more reliable.

Wind energy sector: Adverse environmental conditions often hinder the capacity of the seal and lubricant in the long run. In order to overcome this impediment, materials scientists at Freudenberg Seals and Vibration Control Technology have developed a high performance material 'Ventoguard' that features greater temperature and ozone resistance, ensuring a longer service life. Ventoguard materials lower the minimum temperature from minus 30 to minus 40 degrees, significantly extending the range of applications, especially with respect to different locations and extreme temperature conditions. Another advantage is that the relaxation behaviour of the material has been significantly improved which is important for effective sealing in the long term and in turn offers cost benefits.

Besides tailor-made seals and lubricants from Simrit and Klüber, Chem-Trend, part of the Freudenberg Group, has developed a new series of release agents that offer outstanding performance when removing rotor blades from the mould. Wind turbine rotor blades play a significant role in energy efficiency. The design and shape of the blades have been optimised to meet steadily growing requirements for improved aerodynamics and the highest possible energy yields. Rotor blades are moulded from a wide range of composite materials. With special release agents from Chem-Trend, it is easier to release the blades from the mould without damaging them, which was a cause of concern with regard to energy efficiency.

Furthermore, products from Freudenberg Nonwovens are used for composites (FRP) which are suited for surface protection and as core material in products such as pipes, tanks, container boards, facade panels, skis, surfboards, boats and even rotor blades for wind power stations. Surfacing nonwovens improves the resistance to both corrosion and abrasion defects. Core materials are used to reduce the weight and to increase mechanical strength which helps in cost reduction.

Can you briefly discuss Freudenberg's plans to develop India as an innovation hub?
Innovation plays a key role in Freudenberg's corporate culture. Innovation is a milestone in the history of the group and its development. With good reason, we have anchored a commitment to innovation in our Guiding Principles. To bring this commitment to life, Freudenberg has created structures encouraging innovation. In our corporation, research is carried out by individual enterprises as well as by a dedicated research company called Freudenberg Research Services.

As an example, the new Freudenberg Gala Household Product site in Adas, with a total area of 30,000 sq. metres, a production area of 5,500 sq. metres and 2,500 sq. metres of storage, manufactures the latest household products and also has its own research and development department.

What has been the outcome of your partnerships with Indian companies like Thermax?
Freudenberg Filtration Technologies has established a promising partnership with Thermax, an Indian energy and environmental technology company, to jointly offer innovative filtration and cooling solutions for large gas turbines and compressors for the energy, petrochemical, iron, steel and other sectors. Jointly Thermax and Freudenberg Filtration Technologies have developed an entirely new system, Viledoneee.Sy (energy efficiency enhancement system), that cools the intake air of a turbine up to the ideal value of 15'C allowing an improvement of up to 25 per cent in energy efficiency and reducing CO2 emissions.

Other added benefits of the new system are reduced maintenance expenses due to the longevity of Freudenberg filters, reduced stress on turbine blades besides extension of service lives of turbines and compressors.

The partnership has since completed several implementations including one at a Tata Chemicals fertiliser plant. The new solutions system is of considerable benefit to industrial plants in tropical and subtropical zones, where high humidity and temperatures severely impair the efficiency of gas turbines and compressors.

Can you tell us more about the Freudenberg India Entrepreneurial Leadership Development programme and its avowed goal?
A few years ago Freudenberg started its FIELD (Freudenberg India Entrepreneurial Leadership Development) programme. The intention of FIELD is to train and develop Freudenberg's future leaders in the areas of sales, operations and finance.

The participants of the programme are mainly recruited from the Indian Institutes of Management in Bangalore and Kozhikode. The programme starts with crossfunctional training lasting six to nine months in one or two Freudenberg companies in India. This is followed by 12 to 18 months in a group company in Europe, Asia or USA. In this phase, participants take on first job responsibilities, gain international exposure and start to build their own Freudenberg network. They also become familiar with the Freudenberg culture and the manner in which the group conducts its business.

At the end of the FIELD programme, the participants are offered management positions in a Freudenberg company primarily in India but possibly also in other countries. FIELD aims to attract ambitious graduates with a problem solving attitude, excellent communication and listening skills, the ability to work in a multi-cultural environment, and with a high degree of mobility. Freudenberg offers its graduates a global perspective from the beginning of their career and the opportunity to take over management positions in a fast growing, value-oriented company.