Germany-based lubricants manufac-turer Fuchs Petrolub, with a yearly turnover of €1.8-billion, announced in May that it had acquired South African lubricant manufacturing companies Lubritene and Lubrasa.

The two local companies manufacture high-performance specialised lubricants, such as greases, compounds and oils, for the mining, industrial, drilling, food and other commercial industries.

In the mining industry, the product appli-cations include drilling, draglines, rope shovels and haul truck lubrications.

Fuchs Group management committee member Alf Untersteller says the acquisition is significant for the group and for the local Fuchs subsidiary.

“It will enable Fuchs Group to enter new markets worldwide and provide export opportunities for the local subsidiary. The group’s 31 manufacturing plants situated around the world will be used to manufacture and distribute this well-known and established product range, and will benefit from Fuchs’ leadership in technology, innovation and specialisation,” he says.

Research and development are key factors in Fuchs Lubricants’ success. “There are currently 385 engineers, chemists and scientists engaged in research and development around the world developing new products and assisting customers in solving problems based on a yearly research and development budget of over R450-million,” says Untersteller.

Because Fuchs Group has a strong balance sheet and is debt free, with five years of successive record profits up to 2013, as well as a record first quarter this year, funding for the acquisition, ongoing expansion and research and development will come completely from internal sources.

In line with this, Fuchs South Africa is also expanding its Isando-based plant and office space, having bought a third property located next to the company’s existing two sites.

Fuchs South Africa MD Johan Hyman says the new premises are being renovated and will accommodate Lubritene and Lubrasa’s staff complement of over 100 people by next year, as well as provide significant additional production capacity.

“The products acquired will be made available to Fuchs’ 100 000 customers world-wide, opening new markets for the group,” he says.

The product offering will also benefit from Fuchs’ research and development capabilities in growing the existing product range and complementing Fuchs’ more than 10 000 products.

“In terms of the acquisition, both organisa-tions have similar business cultures and customer values and we are confident of a seamless integration. “The work ethic is based on trust, respect, creating value, reliability and integrity,” says Hyman.

The local Fuchs Lubricants subsidiary stands to increase turnover by about 30% and the staff complement by about 50% to around 250 people.

“The Lubritene and Lubrasa plants are currently both working at full capacity and we expect there will be no retrenchments as a result of this transaction,” he says.

Australian Expansion
In other news, Fuchs Lubricants announced in April the construction of a new manufacturing plant in Beresfield, in New South Wales, Australia, to increase its Australian manufacturing capacity.

With a move from the existing Newcastle Fuchs site, in Wickham, Australia, the new facility will be constructed on a greenfield 25 000 m2 piece of land in Beresfield.

Fuchs Lubricants Australasia MD Wayne Hoiles says this project will be a significant investment into the Newcastle region, and is part of an ongoing strategy to increase Fuchs’ investment into its operations in Australia.

The development process began in April with the purchasing of the land, and construction is expected to start mid-2015 and be fully operational in mid-2016.

The Beresford site was chosen for its proximity to all major connecting highways north, south, east and west of the region, and was close enough to the existing Wickham site for all existing employees to be able to continue to work at the new plant.

“While such a significant portion of Australia’s manufacturing is moving offshore, we have focused on growing our business in Australia and New Zealand, particularly in high-demand areas.

“The existing site in Wickham was too small to expand, so we made the decision to move to the new Beresfield site, which will allow us to maintain our experienced workforce and increase our production capacity and operational efficiencies to better service our key customer base in New South Wales and Queensland,” he says.

Fuchs manufactures a diverse range of engine, gear and hydraulic oils, engine coolants, grease and cleaning products to meet the unique demands of the Australian mining industry, and customers in the Hunter Valley region will benefit significantly from this new facility.

Fuchs Petrolub AG executive board member responsible for the Asia-Pacific and Africa region Dr Georg Lingg says the Australian mining industry is of significant importance to Fuchs Group, and the construction of this new manufacturing plant will allow the group to improve the responsiveness and quality of its service for its Australia-based customers.

“This commitment is part of our global investment programme to invest in the future, particularly in the growing South-East Asian region,” he concludes.