CITIC Dicastal Co., Ltd. Business Report FY ended Dec. 2014

Business Highlights

Financial overview

SMX Dicastal Wheel Manufacturing Co., Ltd.
-SMX Dicastal Wheel Manufacturing Co., Ltd., an affiliate of the Company, produced 3,880,900 wheels and generated CNY 1,011.51 million in sales in 2014, achieving year-on-year improvements of 10.33 percent and 10.65 percent, respectively. (From news releases issued by multiple sources on February 6, 2015)

Off the Line

-KSM Qinghuangdao Auto Parts Manufacturing Co., Ltd., a subsidiary of the Company, launched operation of a machining line in August, 2014. The first lot of prototypes of engine cylinder heads rolled off the production line on the same day. The cylinder heads will be supplied to Volkswagen. (From a press release on August 4, 2014)

Strategic Alliance

-The Company announced that it held a signing ceremony for its new strategic alliance with Siemens in January, 2015. Siemens will be CITIC Dicastal's strategic partner in carrying out its intelligent technology project. With the support of the global engineering company, CITIC Dicastal will work on introducing digitalized systems in auto parts development, production, and lifecycle management. (From a press release on January 20, 2015)

R&D Structure

-The Company conducts development activities at its technical center, which was established in February 1993. The technical center has been recognized as a national R&D center by the National Development and Reform Commission since October 2005.

-The Company has established overseas R&D centers in Europe and North America and a technical center in Japan. Due to its overseas technical centers, the Company is the first wheel manufacturer which can provide synchronous development together with global automakers. The Company's synchronous development projects have been extended to 2015.

-The Company's  Wheel Testing Center is the largest one in Asia. (From news releases issued by multiple sources on February 3, 2015)

Technical Cooperation

-In December 2014, the Company and Tsinghua University signed a letter of agreement to form a strategic technical alliance. In accordance with the agreement, the industry-university partnership will collaborate on developing advanced high-pressure casting technologies and pressure aluminum casting technologies in order to produce lightweight cast aluminum products. (From news releases issued by multiple sources on December 26, 2014)

-In December 2013, the Company announced that the company, the School of Materials Science and Engineering of Tianjin University, and the School of Material Science of Hebei University of Technology agreed to conduct joint development of new aluminum alloy. The development team will study the properties of amorphous materials to refine the substances. They hope to develop lightweight and high-strength aluminum alloy by using the refined materials. (From a press release on January 23, 2014)

Patents

-Recently, the Company carried out more than 50 R&D activities with research institutions and universities and obtained more than 300 patents.

Investment in China

-The Company is constructing a new testing laboratory at its automotive wheel testing center located in the Qinhuangdao Economic & Technological Development Zone in January, 2015. The new laboratory will have a floor area of 12,050 square meters.It is expected to take 11 months to complete. The Company plans to invest CNY 22.44 million in this project.The new laboratory will test and inspect some major components such as steering knuckle brackets and steering linkage brackets. (From news releases issued by multiple sources on February 3, 2015)

-Qinhuangdao Dicastal Xinglong Wheel Manufacturing Co., Ltd., an affiliate of the Company, is investing CNY 240 million to establish a plant that is capable of producing 1.8 million high-strength aluminum alloy wheels per year. The construction project is carried out in two phases, and the company has already completed the foundation work in the second phase. The facility is scheduled to be completed by the end of 2015, and will be able to produce 600,000 spinning aluminum alloy wheels and 1.2 million cast aluminum alloy wheels per year. Part of the facility has already been completed in the first phase of the project, and the plant currently has the capacity to produce 700,000 wheels per year. When the whole project is completed, the company’s overall annual production capacity is expected to reach 10 million units, the largest in the global market. (From news releases issued by multiple sources on October 21, 2014)

Investment Outside China

-The Company announced that it will invest USD 140 million to establish an aluminum wheel plant in Greenville, Michigan, U.S.A., which will become the company’s first production base outside China. The plant’s annual production capacity is expected to reach 3 million units per year. CITIC Dicastal purchased a 98-acre parcel in Greenville from Uni Solar that had filed for bankruptcy, and plans to build an additional 929 square meters of manufacturing space. (From news releases issued by multiple sources on September 28, 2014)