FUCHS’ new facility in China is just half an hour away from the old manufacturing location. It is generously dimensioned, highly automated, and technologically state-of-the-art. The new facility is one of the largest production locations in the FUCHS Group and represents another milestone in the global growth initiative.
The journey takes us over long, arrow-straight asphalt. Newly constructed roads branch off to the right and left, passing by large, as yet undeveloped plots of land. The Bohai Gulf, a part of the Yellow Sea, is just a few miles away. In a few years, the chemical park located near the coast in Yingkou will be completely full – just like most of the other industrial settlements in China. The economy is growing very quickly – and with it companies such as FUCHS China, which is now set to begin production operations at an ultra-modern facility in the port city located in Northeast China.
“We are absolutely delighted to finally be able to start work in the new halls,” comments Chang Jianhui, head of the manufacturing operations in Yingkou, one of the largest production locations in the FUCHS Group. Covering a total area of around 860,000 square feet, the plant is nearly the size of the main facility in Mannheim. The location completely replaces the old one in the city center, which began production 25 years ago and was initially only capable of supplying 200 tonnes per year.
Construction work on the new facility was completed in only two years. FUCHS invested more than €24 million to be able to produce lubricants for vehicle manufacturers and automotive suppliers, the steel industry, the mining industry, the food industry, as well as the fields of transport and agriculture. This is a calculated investment, as the market in China is constantly growing. Indeed, business with international and national companies in China contributes just under half of the company’s sales revenue in the Asia-Pacific, Africa region – and thereby around 13% of total Group sales revenues. More than 300 employees work at the headquarters (HQ) in Shanghai, the facility in Yingkou and more than 15 branch offices, as well as a large number of local warehouses.
PLENTY OF SCOPE FOR FURTHER GROWTH
“There were two reasons why we wanted to construct a new facility. Firstly, we had grown massively and needed more space. And secondly, the city declared the area in which we were manufacturing as a purely residential zone,” explains Zhu Qingping, Head of FUCHS China. This is nothing unusual in China, as the country’s cities are constantly growing. For example, Yingkou, which is just over 1,000 miles from the FUCHS HQ in Shanghai, now has 2.5 million residents. The city has more or less grown around the production facility since it was opened. “We have enjoyed excellent cooperation with the Chinese authorities over the years and were therefore able to locate an ideal plot of land for the new facility with the support of the administration,” explains the 51-year-old, who joined FUCHS four years ago and was previously able to gather a great deal of experience at one US and one Chinese automotive supplier. He is very satisfied with the choice. “We have a good transport infrastructure and enough space to grow.” We are already in a position to increase production, which is set up in modules, year-on-year. The site also offers expansion potential.
The new location looks impressive. When viewed from a distance, it is easy to make out the round gray tanks that hold around 150 different base oils and more than 1,000 chemical additives. These are also hard to tell apart from the slightly smaller containers used to store finished products, such as engine, transmission or machine oils for automotive manufacturers or other industrial enterprises. The process used in the factory sounds relatively straightforward, as it is simply a matter of mixing oils and chemicals together in temperature controlled vessels. However, the special expertise of FUCHS lies in the detail. The precise composition of the mix and the fine nuances in the processing steps ensure a high quality product. “We produce around 2,000 products in this way for various applications,” explains Zhu Qingping.
The new production halls are generously dimensioned and perfectly set up for the processes.
He believes that the new facility will provide a powerful impetus to implement the key maxims of his work even more effectively: quality in production, service for customers and product technology at competitive prices. Only when these work in harmony can FUCHS achieve the targets it has set itself in China. “We need to produce a product of outstanding quality that is always consistent and for which customers are willing to pay a fair price,” adds Zhu Qingping. This provides an indication of the perfectionism with which the team in China works. “We have a measured customer satisfaction rate of about 98%, which we are keen to improve even further. One example: our products need to be of the highest quality so that we can achieve this target.” All of the processes are geared toward this. “We always comply with standards, which also requires us to select our suppliers very carefully and then continually train them.”
Maintaining a keen customer focus is equally as important. “We not only offer perfect products, but also solutions,” explains Zhu Qingping. For example our partners from the heavy industry or automotive sector are not experts when it comes to oils and greases. Instead, they generally focus their efforts on keeping tight control over their own processes. “We support them in continually improving these processes and also optimizing our own portfolio. Simply selling a product is not enough in our opinion.” For example, 24 staff members are currently working in-house at a major German automotive manufacturer to ensure that the FUCHS products are always used in the right places within the large machine pool in operation.
Zhu Qingping, Head of China at FUCHS.
New tank farm for 150 base oils.
The technologies utilized by FUCHS also have the added advantage that they create value for customers. “This makes our products slightly more expensive, which we obviously first have to explain to our customers. Buying our products brings a significantly higher benefit,” comments Zhu Qingping.
Works manager Chang Jianhui believes that the new facility will help both him and his team achieve this. With his double bachelor’s degree in polymer chemistry and industrial management, he is well prepared to meet all the requirements associated with his position, including understanding and further developing technologies – while at the same time securing economic production. Chang Jianhui was heavily involved in the processes for equipping, installing and later also fitting out the facility. This has helped him establish a high degree of identification with the manufacturing operations. In fact, Chang Jianhui is so involved that he actually refers to the new halls as “heaven” – because they are so generously dimensioned and perfectly set up for the processes.
There are lots of differences from the old facility – where the main storage area was located some 20 minutes away from the production operations. At the new location, the warehouse is integrated into the facilities. The new equipment which has been installed in the high ceiling halls also provides a significantly higher degree of automation. “We can operate the new facility with the same number of staff members as the old one,” explains Chang Jianhui. The subsidiary FUCHS CHINA employs a total of 336 people, around 30 of whom work in production.
CORPORATE CULTURE MOTIVATES EMPLOYEES
Personnel is one of the most important factors for FUCHS, explains Chang Jianhui, who previously worked for a US mineral oil group. He knows what he is talking about here, as he has experienced it first-hand. “I was really keen to join the company, as I had heard so many positive things about it. I already felt confident that I had made the right decision during the interview, and this initial impression was then confirmed when I started work here,” comments the plant manager, who joined FUCHS in 2013. His employer is highly specialized in its processes and products, which he finds great. “But above all, the company relies heavily on its workforce, in which it places a great deal of trust. This is something that continually motivates me.”
Klaus Hartig likes to hear this, as he also relies on a well-trained and efficient team. “Finding the right people for this is not easy in China”, explains FUCHS’ Head of Asia, who is responsible for Japan, Korea, and China. “In certain areas, in particular sales and technology, the battle for the best staff is in full flow, as there is a great deal of competition among the various employers.” This is another reason why FUCHS has a high quota of international employees in China, including staff from Italy, France, Great Britain, Australia, Singapore, Nepal, Japan, Russia, and of course China and Germany. “We invest a great deal in qualifications, further training, and personnel recruitment to help secure the best candidates.” Last year, the company invested as much into coaching programs in one year as it had in the previous seven years – a clear statement regarding the importance of its personnel.
»We are keen to grow in China, both with international and local customers.«
Hartig considers the new facility to offer ideal conditions for achieving the clear objectives that FUCHS has in Asia. “We are just as keen to grow with the international companies we supply here in China as the Chinese companies that purchase our products.” These two customer groups currently represent around one half each – which Hartig believes to be a healthy mix, as they both still offer good growth opportunities.
At the same time, the quality that other companies in China can now offer has also improved drastically. “Chinese companies have their own, excellent technologies,” stresses Hartig. The larger enterprises in particular are likely to increasingly expand across the Asian markets in the mid term, but then also focus on other markets such as South Africa or Brazil further down the line. “We will accompany them throughout the world. With our broad network and many locations worldwide, we can also demonstrate our skills and capacities as a good partner.”
