By Jin Jing (China Daily)
Updated: 2008-03-07 11:04

German chemicals manufacturer Freudenberg Group will build a 200-million-yuan Shanghai plant to make specialty lubricants and release agents.

The company said yesterday local production could help boost its sales here. As well as lubricants and release agents, it sells auto interior filters and Vileda brand household products.

Sales in China rose 16 percent from 2006 to 3.585 billion yuan (US$504.2 million) in 2007, Freudenberg said. Chemical products for the auto industry accounted for about 40 percent of total sales. Since 2000, the manufacturer has invested 1.4 billion yuan in Chinese projects.

The Shanghai plant will be the company's first Chinese facility for lubricants.

Freudenberg's two subsidiaries, Kluber Lubrication and Chem-Trend, set up a sales business in China 10 years ago.

Lubricants and release agents are widely used in the auto, textile, plastic and timber processing industries.

"We decided to expand investment in China because the potential growth of the China market is stronger than other countries'," said Hanno D. Wentzler, president of Freudenberg Chemical Specialties KG.

China is one of only a few markets in the world with a growing lubricant industry. Annual consumption of lubricants in China is between 4 and 4.5 million metric tons, the world's second highest.

The new plant, located in Qingpu, covers an area of 33,000sqm. The company expects an annual capacity of up to 13,000 tons.