China: an important key to success for Freudenberg

Long-term strategy strengthens Freudenberg in difficult economic conditions

Weinheim. June 3, 2009 - The Freudenberg Group is continuing its commitment to the growth market in China during the difficult economic period. The internationally active family company generated sales of 3.7 billion RMB in the region in 2008. This corresponds to year-on-year growth of 5.9 percent. In the People's Republic of China, sales rose by as much as 16.3 percent. The headcount increased from 3,607 in 2007 to 3,764 in 2008. By the end of 2008, the Group had invested over 1.62 billion RMB in production and sales in the region. The company's strategy is: long-term commitment in China for long-term success. The Freudenberg Group, which was founded exactly 160 years ago, sees itself well prepared for structural change and intends to emerge from the present economic crisis with renewed strength.

Activities in China to expand further
Freudenberg has been laying the foundation for further growth in China since the beginning of this year: On January 1st, 2009, Freudenberg Nonwovens' filter division became a stand-alone business group known as "Freudenberg & Vilene Filter China". As before, market activities will be conducted together with joint venture partner Japan Vilene Company. The new company supplies filter solutions for air, gas and liquid filtration for automotive, general industry and healthcare applications to the Chinese market. The Business Group, which operates two production facilities in Suzhou and Changchun, contributes to improving the efficiency of industrial processes, preserving resources and protecting the environment in China.

Freudenberg IT, the fastest-growing IT company in China, employs some 80 IT experts and is continuing to expand in the region. Last year, the young company tripled sales year-on-year. With its two data centers in China and a new branch in Beijing, Freudenberg-IT plans to focus even more closely on the local market and extend its range of services even further. The core business of the global SAP hosting partner relates to consulting and outsourcing for small- and medium-sized enterprises. The IT service provider supports its customers in all business processes, tailoring solutions to meet individual requirements. Freudenberg-IT's production software suite has already won several awards as the best software for the Chinese market.

Systematic business expansion
"China is one of our most important growth markets. That is why we have high hopes for our companies there. In the present economic situation in particular, growth in China has a stabilizing effect on the Freudenberg Group as a whole," Hanno D. Wentzler, the Freudenberg Group's Regional Representative China, commented. "Our long-term strategy, innovative strength and pronounced customer orientation put us in an excellent position for further growth. We remain committed to our plans for the future, even given the present circumstances."

In the current situation, Freudenberg is benefitting from its conservative financing policy oriented to the long term as well as from its continued high equity ratio and good liquidity. For many years now, the German group of companies has been pursuing a risk diversification strategy with regard to both customer groupings and regions. Freudenberg will continue with this strategy and will further intensify its activities in the general industry sector as well as medical technology, oil and gas, civil aviation, heavy hydraulics and renewable energies.

About Freudenberg in China
Freudenberg has held business ties with customers and partners in China for over 100 years. The Group has a workforce of 3,764 employees at 35 locations. Freudenberg generated sales of RMB 3.7 billion in 2008. By the end of 2008, the Group had invested over RMB 1.62 billion in production plants and distribution.

About Freudenberg
Freudenberg is a Germany-based family company offering its customers technically chal-lenging product solutions and services. Freudenberg has acquired a reputation as a technol-ogy specialist for seals and vibration control technology, holds a leading position in the field of automotive interior filters, and also supplies backings for automotive carpeting, engine compartment insulation and auto headliners. Lubricants and release agents are used in the automotive industry and many other applications. A further important sector for Freudenberg is the textile and clothing industry, where Freudenberg Nonwovens keep garments in good shape, protect buildings through roofing membranes, are fitted in power station filter systems as well as in factories. Some Freudenberg products are consumer products. The best-known are household products, sold worldwide under the Vileda brand name. With approx. 170 pro-duction and sales locations in 52 countries and its business partnership, the company is present in all of the world's major markets. Consolidated annual sales of the Freudenberg Group exceed RMB 50 billion and the company employs around 33,000 people worldwide.

Press Contacts
Lynda Coward
Freudenberg Chemical Specialities KG
Unternehmenskommunikation
Tel. +49 89 7876 - 90 18 71
Fax + 49 89 7878 - 90 18 71
lynda.coward@fcs-munich.com