Joint venture set up with Chinese partner
KSPG equips its aluminum castings business for the future
International first-tier auto-industry supplier KSPG AG, which belongs to the Rheinmetall Group, is strengthening its aluminum castings operations by entering into another partnership. Only last year, KSPG AG had announced that it was seeking a strategic partner for its Neckarsulm-based KS Aluminium-Technologie GmbH. The objective was, together with an internationally established company, to address globally the upbeat developments shaping up for this business.
This is why KSPG has set up a joint venture with HUAYU Automotive Systems Co., Ltd. (HASCO), a company whose majority shareholder is the Chinese SAIC Group. Each of the venturers holds a 50-percent stake in the company which shall be located in Neckarsulm/Germany. The deal is subject to approval by the respective antitrust and cartel authorities.
Ever since 1997, KSPG and HASCO have been very successfully cooperating in a Chinese joint venture for pistons. Moreover, further joint ventures have since then been founded such as in 2001 Kolbenschmidt Pierburg Shanghai Nonferrous Components (KPSNC) or most recently Pierburg Huayu Pump Technology. In fact, these 50/50 Chinese joint ventures, for which annual growth rates of up to 30 percent are anticipated for the coming years, generated aggregate sales of around €500 million and employed a workforce of 3,500 in 2013.
Says KSPG CEO Horst Binnig: “We are regarding the “Castings” business unit as an important component of our future corporate strategy and our aim is for the companies forming the joint venture together with HASCO to evolve into a foremost international manufacturer of vehicle components in aluminum castings over the years ahead. This objective will be achieved through the combination of existing production capacities in Germany and China as well as future expansion into other markets.”
In view of the emerging growth in the market for components cast from aluminum alloys, the new alliance opens up further possibilities of expanding this business. The high-tech castings business will then be driven and managed globally together by two powerful partners. Investments and market entries will be jointly controlled by the two partners of this innovative provider to the car manufacturers.
The joint venture will be continuing to engage all employees presently working for KS Aluminium-Technologie GmbH and its subsidiaries. The total workforce will then be in the region of 900; sales in 2013 in this product sector totaled around €200 million.
To the joint venture KSPG is also contributing Werkzeugbau Walldürn GmbH, Walldürn, and its 50-percent stake in the joint venture KS ATAG TRIMET Guss GmbH, Harzgerode.
With an annual production of around 19 million cars, China is easily the world's biggest auto market. Reporting sales of €15.5 billion in 2013, HASCO is one of the biggest auto-industry suppliers within China besides having a global network of locations. As a subsidiary of Shanghai Automotive Group Company, Ltd. (SAIC Motor), the company has close market access to Shanghai Volkswagen and Shanghai GM as well as all the other leading automakers.