Japanese suppliers unite with local suppliers in Europe, while localizing R&D structure in Germany

Akebono Brake, Advics, Calsonic Kansei, NTN and Daido Metal

2011/12/20

Summary

 This Report summarizes movements of Japanese suppliers in Europe over about one and a half year up to October 2011. Japanese parts suppliers have been operating their business in Europe as a part of their global strategies or by leveraging the alliance with major local parts suppliers. As for R&D centers, some of them expanded their existing centers, while some built new facilities. In Germany, five suppliers including Akebono Brake and Advics are expanding their local development structure.


(This report covers the trends for about 16 months up to October 2011).



Germany: IHI to expand the local plant step by step, while Akebono Brake and Advics to build new plants

 In Germany, IHI is expanding the local plant in stages, while Akebono Brake, Advics, KYB, TS TECH, Mitsubishi Rayon and Yokowo will be building their new plants.

IHI to expand the German turbo charger plant in stages
 IHI will expand the German turbo charger plant (IHI Charging Systems International Germany GmbH in Thuringen State). Following the agreement to supply the products to Audi, IHI will increase the lines, and manufacture major parts of the products. It plans to produce 500K units annually in 2011. The German plant started with a production volume of 25K units (during the nine-month operation) after the completion of the construction in spring 2009. The company planned to expand the annual production capacity to one million units in FY 2011 at first.
 Since turbochargers ensure both dynamic performance and environmental responsiveness, they are much in demand in Europe. In 2008, turbocharger-equipped vehicles reached 50% of the total in Europe. There is an estimate that those vehicles will account for 75% in 2015.
Akebono Brake breaks off negotiation of buying out part of the brake business from Bosch, but to expand European business on its own instead
 Akebono Brake announced in March 2011to break off the negotiation of buying the foundation brake business from Bosch after the consideration since November 2010. The brake supplier did not want to take over the non performing business, while Bosch conditioned the assignment of all divisions except North American Division (Europe, Asia, Australia and Latin America). Accordingly, they did not reach an agreement about this matter. Akebono aimed to supply high spec products in the European markets, although Bosh has an advantage in low-end vehicles. The Japanese supplier finally found the business field different from its target.
 To realize the 2015 sales plan (300 billion yen) included in the long-term vision, Akebono will eye on business expansion on its own and M&A other than Bosch.
 In June 2011, Akebono Brake unveiled the plan to expand the European business. It announced plans to build a new plant in East Europe and a new R&D center in Germany for the brake caliper business. According to Akebono, it will accelerate proposal activities to not only German OEMs but also other European OEMs. The company has made inroads to the French friction material market in Europe. It will expand other key component businesses.
Advics to establish R&D and sales company for brake parts in Germany
 In July 2011, Advics established ADVICS Europe GmbH, a development and sales company for brake parts in Neu-Isenburg city, Germany. The company has not had business with European OEMs yet at that point. It will attempt to expand local technical support and obtain businesses with them. Advics invested 500K Euros in the new company, expecting to have FY2017 sales of ten billion yen. Following the establishment of the new corporation, Advics closed the European office in Belgium.
Eagle Industry buys out two businesses from Freudenberg NOK Mechatronics in Germany
 Eagle Industry bought out the control valve business and the actuator business from Freudenberg NOK Mechatronics for about one billion yen in July 2011. Accordingly Eagle Industry has acquired the Hungarian Plant (Actuator Components Hungary Kft. in Pest) and the German Plant (Actuator Components GmbH & Co. KG in Weinheim city). With regarding the scale of the operation, the two businesses have sales of 1.5 billion yen, operating profits of 200 million yen, and about a hundred employees. In Hungary, Eagle Industry will improve the cost competitiveness by increasing local content. Freudenberg NOK Mechatronics is a joint venture of NOK and Freudenberg in Germany, both of which are the shareholders of Eagle Industry.
KYB establishes European Business Headquarters in Germany
 KYB established its European business headquarters in Germany (KYB Europe Headquarters GmbH in Nordrhein-Westfalen state) in December 2009 to expand sales for Europe, which accounted for about 15% of its total sales in FY2010. KYB's European business has sales centers in Germany, England, France, Italy, Spain, Russia and Poland, and supplies shock absorbers to BMW, Audi and Citroen.
Tatsuta Chemical and Benecke-Kaliko AG in Germany sign technical alliance agreement with regarding interior surface materials
 Tatsuta Chemical and Benecke-Kaliko AG, an interior company of Continental AG Group signed the technical alliance with regarding interior surface materials according to the announcement in August 2011. Both companies will fuse the laser beam machining from Benecke-Kaliko and the surface materials manufacturing technology from Tatsuta Chemical to develop highly value-added interior materials in a short term. The companies will establish the start-to-finish system from designing through to manufacturing interior surface materials to increase orders and develop new markets including the US.
TS TECH to establish its German corporation following orders for seat frames from VW
 TS TECH strengthened sales and development structures in Germany, and established TS TECH Deutschland GmbH, its wholly owned subsidiary, in July 2011. TS TECH invested ten million Euros. TS TECH used to use its liaison offices in Germany and other countries. Taking it as an opportunity that it received the orders for seats of new SUVs from VW in May 2011, TS TECH established the subsidiary as European headquarters. TS TECH will select plant sites in Germany with an eye to receiving orders from Audi and BMW.
Denso expands the R&D center in Germany
 Denso expanded the R&D center in Germany (DENSO AUTOMOTIVE Deutschland GmbH, Aachen Engineering Center in Wegberg city), and started operation of the center in July 2010. Denso spent 19.3 million Euros in the center to build a new building and reinforce the test facilities. Denso will expand the current scope of development, designing and evaluation only for engine components to include electronic and electric devices to meet local customers' needs.
Mitsubishi Rayon opens a European liaison office for carbon fiber and complex materials business in Germany
 In August 2011, Mitsubishi Rayon opened a European liaison office for the carbon fiber and complex materials business in the premises of Mitsubishi Chemical Europe GmbH in Dusseldorf city. Mitsubishi Rayon will strengthen the European sales that have been undertaken by the U.K. office of its subsidiary, aiming to make it a local corporation which will have a development function. More specifically, the future company will propose new materials and shape forming methods, development of interim materials with local partners and so on. The office will start with one resident officer and a few contract workers. Mitsubishi Rayon will increase the number of employees and strengthen the functions as early as possible.
 The carbon fiber and complex materials markets in Europe have been rapidly growing, especially in Germany, since BMW employed those materials for the whole vehicle structure of small EV i3 and PHV i8.
Yokowo establishes a European sales center in Duesseldorf
 Yokowo newly established a European sales center in Duesseldorf, Germany (Yokowo Co., Ltd. German Office) in May 2010. It is intended to develop new markets for connectors for vehicles and electronic devices and enhance the customer support. Yokowo attempts to have sales of 600 million yen in new European markets in 2012.

Source: Press Releases of the above companies, and news reports

 



Eastern Europe: Daicel expands local production; Sumitomo Electric shifts production from Eastern Europe to North Africa

 In Eastern Europe, NTN, Daicel, Daido Metal and Taiho Kogyo will expand production. Sumitomo Metal, however, will downsize the Eastern European plant to shift it to North Africa, seeking for low-labor costs.

NTN to have new plants for hub bearings and constant-velocity joints in Romania
 NTN unveiled the plan to build an additional plant in Romania in the FY2011-2013 medium term plan. The investment will be at the several billion yen-scale. It will build new plant buildings in the existing plant (NTN-SNR RULMENTI in Sibiu prefecture) to double or triple the production capacities for hub bearings and constant-velocity joints.
Sumitomo Electric downsizes the Eastern European plant of wire harnesses while expanding the Tunisia plant
 Sumitomo Electric downsized the Eastern European Plant for wire harnesses. The Slovakian Plant (SE Bordnetze-Slovakia s.r.o. in Nitra administrative district) will be downsized to 900 employees (2,000 at its peak), and the Poland Plant (SE Bordnetze-Polska Sp.zo.o., Lubuskie prefecture) to 7,000 (10,000 at its peak). On the other hand, Sumitomo Electric will expand the Tunisia Plant (SE Bordnetze Tunisia S.A.R.L in Jendouba Governorate prefecture) within FY2011. While the labor cost in Eastern Europe has been rising, Sumitomo Electric decided to expand the plant in Tunisia, where the labor cost is one quarter of that of Eastern Europe. The Tunisia Government provides preferential treatments concerning taxes.
Daicel to double the production capacity of the Polish Plant for airbag inflators
 Daicel will double the production capacity of the Polish Plant (Daicel Safety Systems Europe Sp.zo.o.) for airbag inflators from the FY2010 level by FY2013. It will locally procure additional production facilities with the expansion of the capacity, according to the news report in March 2011. Daicel will also expand the plants in Kentucky, US, Prachin Buri prefecture of Thailand and Chiangsu province of China to increase the production capacity by a total of 10 million units per year at each plant.
Daido Metal to strengthen the Eastern European Plant
 Daido Metal will strengthen the plants in Czech (Daido Metal Czech s.r.o. in South Moravian State) and Montenegro (Daido Metal Kotor Ad in Kotor city) by FY2015. In Czech and Montenegro plants, Daido Metal expanded lines to double the production capacity in June 2010. This is the second expansion of production capacity following the last expansion. These plants will use aluminum bimetal produced by the Russian bimetal plant (Daido Metal Russia LLC in Nizhny Novgorod State) as a plan.
Taiho Kogyo to produce resin-coated engine bearings at the Hungarian Plant in 2013
 Taiho Kogyo will start production of resin-coated engine bearings at the Hungarian Plant (Taiho Corporation of Europe Kft. in Ujhartyan city) in 2013. Taiho Kogyo will build a total of six new lines at the plant and the US plant. It aims to address intensifying price competition and continuing strong yen. To increase fuel efficiency, Toyota, European and US OEMs have increasingly employed resin-coated bearings. Taiho Kogyo is producing the resin-coated bearings on a total of seven production lines at two plants in Japan. It has monthly production of 3.5 million to 4.0 million units.
 As part of strengthening the company-wide production capacity, Taiho Kogyo announced in January 2011 that it would expand the production capacity for bearing products by three times over the 2009 level to 2.5 million units per month. It attempts to increase business with other OEMs than the existing ones such as Toyota, VW and Daimler.

Source: Press Releases of the above companies, and news reports

 



The U.K., France and the Netherlands: Calsonic Kansei to produce EV inverters in the U.K. and Eagle Industry to strengthen the French Plant

 Calsonic Kansei will produce inverters for EVs at the U.K. Plant by 2012. Unipres will expand business for Honda (UK) by four times over the 2010 level by 2013. Eagle Industry will make an investment in the air conditioner parts plant of its French subsidiary to expand the production. Eagle Industry will transfer a part of production of air conditioner lip seals from Japan to the Dutch plant. Teijin will increase the production of aramid fiber at the Dutch plant by 15%.

Eagle Industry to make an investment in the French air conditioner plant to increase production, and transfer production of air conditioner parts to the Dutch plant from Japan
 Eagle Industry will invest about 1.2 billion yen in the air conditioner parts plant of its French subsidiary (Eagle Industry France S.A.S. in Mosselle) to increase the production capacity by 70% to one million units per year, according to the news report in April 2011.
 Eagle Industry will transfer a part of the production of air conditioner lip seals to the Dutch plant (Eagle Holding Europe B.V. in Limburg) from Japan (same as above).
Calsonic Kansei to start production of inverters for EVs in the U.K. by 2012
 Calsonic Kansei will establish capabilities to supply inverters for EVs in its U.K. Plant (Calsonic Kansei Sunderland Limited in Tyne and Wear states) by FY2011, and will start production of them by 2012. Calsonic Kansei will supply inverters for almost total volume of 50K EV Leafs, which will be produced at the Nissan's Sunderland Plant in the U.K.
Teijin to increase the aramid fiber production capacity of the Dutch Plant by 15%
 Teijin will increase the production capacity of the Dutch Plant (Teijin Aramid B.V. in Gelderland state) by 15% within 2011 as it will expand production of aramid fibers which has superior heat resistance and strength. It had the 2010 production capacity of 25K tons per year as a production average. Aramid fibers are used for the application to reinforce high performance tires. The 2010 global demand was around 50K tons. It is expected that the demand will increase by about 7% per year.
Unipres builds a new branch plant near Honda Plant in the U.K., and introduce a 3,000-ton class transfer press machine in its own plant in the U.K.
 Unipres built a new branch plant for final assembling near Honda's finished car plant in the U.K. in 2010. It drastically reduced logistics costs by assembling the parts transported from its U.K. plant (Unipres (UK) Limited in Sunderland city) and supplying the assembled products. Its 2010 sales to Honda in the U.K. reached 450 million yen, up by nearly two times over the previous year. Unipres plans to increase sales by four times to 1.8 billion yen in FY2013. Unipres plans to open three branch plants for Honda in North America. To increase earning strength, the company will increase business with customers except those related to Nissan which constitute 88% of its total sales.
 Unipres invested ten billion yen in the U.K. Plant to introduce a transfer press of a 3,000-ton class pressure capacity (which will start running in February 2013 as a schedule). The plant is going to have a total of six transfer press machines of 1,200-ton to 3,000-ton classes. Unipres aims to meet the plans of the Renault-Nissan alliance as well as to build new businesses. Unipres plans to increase sales of parts in the U.K. to 25 billion yen in FY2013 in the U.K. (which was 21.6 billion yen in FY2010).

Source: Press Releases of the above companies, and news reports

 



Spain/Italy: UBE to double PCD production capacity in Spain; Ichikoh and Ficosa sign comprehensive alliance

 UBE Industries will double the PCD production capacity in Spain. When it starts operation in January 2012, it will be the world largest PCD supplier. Ichikoh and Ficosa, a Spanish supplier, signed the comprehensive alliance in May 2010. Denso completed buying out CTR, an Italian air conditioner parts distributor, in June 2011.

Ichikoh and Ficosa International sign comprehensive alliance with respect to the mirror business
 Ichikoh announced on May 31, 2010 to form a comprehensive alliance with respect to the mirror business with Spanish Ficosa International, which boasts the world third largest share in the mirror business sector. Both companies have already organized teams for sales, purchase, designing and development, production technology and project management. They are working on cost improvement and efficiency improvement. As the first phase of the alliance, Ficosa will take over Ichikoh's North American business.
UBE Industries to double PCD production capacity in Spain
 UBE Industries announced in June 2011 to double the polycarbonatediol (PCD) production capacity of its Spanish plant (UBE Chemical Europe, S.A. in Valencia state). It has an annual gross production capacity of 5,000 tons (3,000 tons in Spain and 2,000 tons in Japan). When the new facilities of the Spanish plant start operation in January 2012, the annual production will sum up to 8,000 tons; and as a result, it will be the world largest PCD supplier. Demand of PCD is rapidly growing as an interior material as well as a high performance material for exterior painting.
Kasai Kogyo and Grupo Antlin in Spain to mutually use ten parts plants in the world
 Kasai Kogyo announced in May 2011 to mutually produce parts at total ten plants in the world with a major Spanish parts supplier Grupo Antlin (GA). Kasai Kogyo will disperse and lighten investment loads to catch up with the movements of its key customer, Renault-Nissan alliance. It also aims to avoid the risk of parts supply attributable to centralized production by shifting to distributed production.
 Kasai Kogyo will maximize the ceiling parts plants of GA in Russia, China and US, and the sun visor plant in Mexico. Kasai Kogyo is also expected to maximize the GA plants in India, Morocco, South Africa, Brazil and Argentina. On the other hand, GA will exploit the sun visor plant which Kasai Kogyo plans to have in China. Both companies already tied up four years ago. This is the first time that Kasai Kogyo announced the details of the alliance.
Denso completes buying out CTR, an air conditioner parts distributor
 Denso completed all the processes in June 2011 to buy out CTR, an Italian air conditioner parts distributor. Denso acquired shares in CTR from its parent company Finber SpA and the founding family members. The amount paid for the acquisition was undisclosed. Denso will make it a subsidiary of Denso Thermal Systems S.p.A (DNTS: in Torino city), Denso's locally-incorporated company in Italy. Denso will continue to use the company name, brand names, the management, the headquarter office and the store houses. The new company was renamed as CTR s.r.l after the acquisition. It is capitalized at 100K Euros. It had sales of about 10 million Euros in FY2010. Its lines of business are "Sales of compressors, air conditioner-related products and heat exchangers in Italy, Spain and France."

Source: Press Releases of the above companies, and news reports

 



Russia: Daido Metal strengthens its Russian plant in a phased manner; Yokohama Rubber improves production and sales in Russia

 Daido Metal will add new production lines for aluminum bimetal at the Russian Plant, and start operation within 2011. In addition, it will increase the production again by FY2015. In addition to building up the tire sales business in Russia, Yokoyama Rubber will build a new plant there to start operation in FY2011.

Daido Metal to add a new production line for aluminum bimetal at the Russian plant
 Daido Metal will start operation of the new production line for aluminum bimetal used for a bearing material at the Russian plant (Daido Metal Russia LLC in Nizhny Novgorod) within 2011. The new production lines are for casting and rolling. Daido Metal spent 300 million yen to add the lines at the end of 2010. As a result, the monthly production capacity was up by 25% to 250K meters. It plans to use produced bimetal at the lines of the same plant, and supply it to Czech (Daido Metal Czech s.r.o. in South Moravia state) and Montenegro (Daido Metal Kotor Ad in Kotor city). Daido Metal will increase the production capabilities of the same plant further by FY2015.
Yokohama Rubber to strengthen tire manufacturing and sales in Russia
 Yokohama Rubber will start operation of the high performance passenger car tire plant (L.L.C. YOKOHAMA R.P.Z.) in Lipetsk state, Russia. The plant will start running with an annual production capacity of 1.4 million tires within FY2011 as a plan. Yokohama Rubber invested about 4.8 billion rubles (about 13 billion yen) in the plant. The construction of the plant was started in March 2010 after the application of tenancy in the special economic zone in December 2008.
 Yokohama Rubber will increase its tire dealers to 800 shops in Russia by FY 2014, up by 2.7 times compared with the 2010 level. It will increase sales volume of passenger car tires to six million tires per year (it was about two million tires in FY 2009) to increase the percentage of sales volume in Russia in its tire sales volume to 10% (it was 3 to 4% in 2010). The member dealers will be increased in the franchise formula which will be taken care by the local distributor (YOKOHAMA Russia L.L.C in Moscow) jointly invested with Itochu.
 It is expected that Russia will have new vehicle sales of 2.6 million units in 2011, while it is expected to become the largest passenger car market in Europe by 2014. The company which has advanced technologies in stud-less tires is the largest supplier of high-priced tires in Russia.

Source: Press Releases of the above companies, and news reports

 



Europe and others: NTN to increase production by 30% in Europe; Daido Metal to establish regional headquarter company in Europe

 NTN will increase production by 30% across Europe by 2013 based on the old SNR plant which it bought out. Daido Metal will establish a regional headquarter company in Europe by March 2018, while considering establishment of a new R&D center.

NTN to strengthen the tie up with the old SNR in France to increase production by 30% in Europe
 In July 2010, NTN changed the name of its consolidated subsidiary in France from SNR ROULEMENTS to NTN-SNR ROULEMENTS, which manufactures and sells bearings for industrial equipment. NTN aims to strengthen the cooperation in development, production and sales with SNR which NTN acquired ownership as a consolidated subsidiary in April 2008.
 NTN will increase production of hub bearings with sensors and constant-velocity joints by 30% by 2013 compared with the 2011 level, centering around the old SNR's plant, to have sales of about 120 billion yen in Europe (it was 87.7 billion yen in the year ended March 2011).
GMB receives orders for engine cooling water pumps from Renault, and starts supplying at a 30K-unit scale per month
 GMB received orders for engine cooling water pumps from Renault, and started supply at a 30K-unit scale per month from July 2010. It supplied same common parts as supplied to Renault-owned Renault Samsung. They were employed for three vehicle models of the Renault Clio, the Renault Sandero and the Logan with an engine displacement ranging from 1300 cc to 1600 cc. GMB aims to increase orders from Renault and obtain orders for the parts for new vehicles from Nissan. For the information, GMB posted sales of 600 million yen in the business with Renault in FY 2010.
Clarion to form a technical alliance with Nokia in car navigation systems and applications
 Clarion announced in June 2011 to form a technical alliance with Nokia from Finland. The partnership is intended to realize the connection and collaboration of Clarion's car navigation applications with Nokia smart phones. Clarion plans to release the applications for the navigation system at the Internet shops "Ovi Store" run by Nokia in 2013 at the earliest.
 Nokia tied up with European OEMs of VW, BMW and Daimler to work on standardization of linking up between smart phones and onboard equipment. Clarion will maximize this partnership and participate in "CE4A (Consumer Electronics for Automotive)," a standardization organization, to strengthen the relationships with European member OEMs.
Daido Metal to establish regional headquarter companies in four regions of the world by March 2018
 Daido Metal will establish regional headquarter companies in four regions of Europe, North America, Asia and China by March 2018. It is intended to promote localization of designing, and establish a self-contained structure of designing, manufacturing and sales per region. At the present, Daido Metal devises strategies by every product in Japan. It will shift the system where each regional headquarter company will develop business strategies to increase its global competitiveness. Daido Metal considers building a new R&D center to develop materials in Europe.

Source: Press Releases of the above companies, and news reports

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