FUCHS – the world’s largest independent lubricant manufacturer – has spent the past two years investing generously in an organic growth strategy. The Chairman of the Executive Board, Stefan Fuchs, takes us on a tour of the plant site and explains what this strategy involves, where it is to lead and what areas the company will be focusing on in the future.
Friesenheimer Strasse is long, stretching around four kilometers along Bonadieshafen. Many companies are based here, FUCHS being one of the largest and longest-standing. The family-run company started production here more than 80 years ago, right from the outset focused on lubricants. What began way back in 1931 with the delivery of oils -imported from the USA- to the companies in the Mannheim port by bicycle, developed into an international success story. Today, the FUCHS Group – comprising 58 subsidiaries operating under the FUCHS PETROLUB SE umbrella – is a global player employing a workforce of more than 5,000 in over 45 countries and manufacturing around 10,000 products.
There’s not a cloud in the sky as we meet Stefan Fuchs – the Chairman of the Executive Board and grandson of company founder Rudolf Fuchs – in front of the new test field building for a tour of the plant site. We are here to talk about two things in particular: the present and the future. What is FUCHS’ current situation? And what goals are on the horizon?
FUCHS has specialized in lubricants right from the beginning. What impact has this had on the company?
Lubricants are the core of our business. We offer more than 10,000 products, every one of which is designed to reduce friction. This might not sound very diverse to a layperson, but we have more than 100,000 customers all over the world, including automotive suppliers and companies from the mechanical engineering, mining, aerospace, power generation, agricultural and many other industries. In close collaboration with them, we develop holistic, innovative and customized solutions for an incredibly diverse range of applications. In other words, we cover an extremely broad and fascinating spectrum.
We take a drive across the FUCHS plant site. A gatekeeper waves to us. Stefan Fuchs smiles and greets him back. We turn right and head toward the main building.
“Agility is a key factor: Our experts make decisions quickly, which we can put into practice instantly.”
The plant site is growing – and so, too, is the company. Why is this?
An intact business model encompassing a high level of product expertise, holistic solutions offering significant added value for our customers and committed and motivated employees. But we don’t want to grow just for the sake of it; for us, it’s about achieving healthy, profitable growth close to where our customers are and sustainably adapting to a changing world. Technological advances, new business models facilitated by digitalization, autonomous driving, e-mobility – these are all fields harboring opportunities that we want to leverage. The FUCHS 2025 initiative, which we launched in 2018, is designed to support us to achieve this. Among other things, we are working on global processes and standards as well as on our leadership culture. Our aim is to become a more agile company based on our five core values of trust, creating value, respect, reliability and integrity.
“Agile” is probably one of the most commonly used words to describe modern corporate structures. What does agility mean for FUCHS?
For FUCHS, agility means communicating without hierarchies and allowing that decisions are made by experts in the specialist areas. It is a question of making proactive and quick decisions that we can implement immediately. Our already established global networks provide a good example here. All employees ultimately work together as a team in a spirit of openness and trust and provide feedback at eye level. Only in this way we can be truly agile and create, for example, shorter coordination cycles.
FUCHS intends to invest more than
100Mio €
in organic growth annually up to 2021.
What does a company have to do to ensure that employees really can provide “feedback at eye level”?
Here I would like to refer you to the last pillar in our mission statement “PEOPLE.”: The people make all the difference here. We have colleagues who are already working at FUCHS in the second and third generation, but our employees are more than 5,000 individuals whose needs we want to address. We have a working atmosphere that fosters trust – including in the future of our company – and is rewarded by the great loyalty of our employees. That makes me incredibly proud. And of course, “feedback at eye level” is not only an internal issue, because we also enjoy a trusting relationship with our customers.
Every visitor who comes here can see that FUCHS is a self-confident organization – and has every right to be so, too: Having been a listed company for almost 35 years, without a single loss-making year in that time and with annual dividend payments. This is a remarkable track record that has laid the foundations for a broad-based investment offensive.
FUCHS is securing its future viability and making huge investments…
Following a foundation, internationalization and consolidation phase, we are now in our growth phase. In 2018, we again recorded further growth with sales of € 2.6 billion. This makes us glad and we intend to continue this trend. Thanks to our FUCHS 2025 initiative, we are preparing ourselves for the challenges that this period of expansion will entail – and, of course, making the required financial resources available. We plan to invest more than € 100 million each year up to 2021. Most of this will be allocated to new plants and plant expansions. Over the coming three years, for example, around € 50 million will be invested in our home location in Mannheim, where we have purchased two plots of land so that we can increase our floorspace by 25 % to 135,000 square meters – a measure that will free up a host of opportunities. This is where we will be constructing a new office building and a high-bay warehouse for raw materials.
In addition, you doubled investment in research and development over the past ten years. The Global Research & Development network constitutes an extremely efficient international research structure. FUCHS’ in-house innovative strength seems to be very highly valued.
That’s right. Our nucleus of research is based here in Germany, but we want to expand above all in the USA and China. It is important to us that local OEMs have access to locally made FUCHS products. It is also important that we support the advancement of pioneering developments such as e-mobility by providing outstanding solutions – after all, new technologies like this require new lubricant applications. Therefore we established our highly successful, global research network. In “Global Key Working Groups,” scientists conduct research into fundamental solutions – core recipes for various product families – above and beyond the scopes of individual subsidiaries, a process that results in tailor made products for specific customers. This approach to research helps us to lay the foundations for the technology of tomorrow.
Stefan Fuchs parks in front of the main building. A short set of steps takes us up to a flat building. We can see huge silos to our left. The foyer is bright, the furnishings modern and understated. And talking of modern:
The digital transformation is currently on everyone’s lips. Every single company must be aware that new digital solutions lead to new processes in both production and administration. Is FUCHS properly prepared for this?
Yes, we have significantly expanded our entire IT area over the past few years. To help us to better coordinate activities in this area, we launched our own Digital Board, which will steer these processes worldwide. The subsidiary inoviga, which we founded in late 2016, acts as our think tank here, opening up whole new ways of thinking and driving forward digitalization projects. Just one example: Holistic systems with sensors designed to make lubricants “talk” so that they can automatically inform us of their status and whether any action is required.
Mr. Fuchs, thank you for talking to us – and of course for the tour of the plant site.
It was a pleasure!
