WEINHEIM, Germany—Freudenberg Group is investing $16.6 million in its Brazil facilities, primarily for non-woven and seal production.
The investment will focus on sites in Jacarei and Diadema, located in the federal state of Sao Paulo. The main component of the investments is to install updated technology at the sites to facilitate capacity expansion and general process optimization. The project began early this year.
“The idea is to bring our site to the same level as the best sites of the company in the world to guarantee that we're going to have productivity improvement that will make us competitive,” said George Rugitsky, president of Freudenberg-NOK Sealing Technologies GmbH & Co. Brazil.
Freudenberg is commissioning a new production line for thermoplastic high-performance components in Diadema together with its Japanese partner, Nippon Oil Seal Industry Co. Ltd. The firm said six state-of-the-art machines were installed at the beginning of the year.
Rugitsky said Diadema focuses on the sealing technologies division of the Freudenberg Group.
The firm also is updating the processes it has in the region. Rugitsky said it renovated a mixing room and improved its primary processes, such as bonding, to the latest technologies.
The Diadema site segmented production by separating high volume from medium- and low-volume product lines. Rugitsky said this was initiated to get the most productivity possible from the high-volume items.
It also improved its technology in the vulcanization area.
Freudenberg is making similar improvements to its facility in Jacarei, which deals with non-wovens.
“A lot of key equipment is coming in,” Rugitsky said. “We received a lot of equipment in the end of last year and some in the beginning of 2014 that we are in the final phase of tryout. There will be more equipment coming in the next month. We'll be constantly changing to integrate all this new technology.”
Rugitsky said the investments are not expected to add a significant amount of jobs, as most of the new technology incorporates automation to keep each plant efficient as labor costs in Brazil rise.
“Our plan is to keep the labor stable considering that we will be able to manage this growth with productivity and automation,” Rugitsky said. “We will have to make some increases in labor, but the plan is to keep it flat.”
The Brazil sites mainly focus on oil seals for the automotive industry, general industry and the aftermarket. Rugitsky said a few years ago the firm brought the gasket division to Brazil, and it is growing fast. The executive said that division has doubled its sales every year.
Freudenberg just brought over its boots division to produce boots for constant-velocity joints for cars. Rugitsky said this division will start production soon. The firm is finalizing customer approval for all the parts produced in Brazil.