Sanluis Corporation S.A.B. de C.V. Business Report FY2011
|(in million USD)|
|FY2011||FY2010||Rate of change
|Sales by business units|
|Suspension North America||377||293||28.7||1)|
1) Suspension North America
-In addition of to natural market growth, in 2011 the Company started production of six new platforms, of which four were for leaf springs and two for coil springs. Additionally, new shipments of leaf springs started for two new customers, Isuzu Motors (USA) and Motor Iberica (Nissan-Barcelona), allowing us to tap the European original equipment market for the first time.
-In 2011, the North American suspension business was able to renew contracts for four of the platforms which it currently supplies to the same number of customers; these contracts total 114 million dollars in annual sales. Furthermore, an additional agreement was reached to supply a new customer, generating 14 million dollars in annual incremental revenues starting in year 2013.
2) Suspension Brazil
-Sales in 2011 increased by 23.4% year-on-year, primarily due to the dynamic economic growth observed in Brazil driven by significant investments in infrastructure. Brazil will also host the soccer world cup in 2014 and the city of Rio de Janeiro, the 2016 Olympic games. These two events are requiring additional investments that result in an increase in demand for mid-size and heavy trucks. This has resulted in a robust economic demand for commercial vehicles, which make 80% of the business unit's sales.
-During the last quarter of 2011, above average increases in demand for commercial vehicles were observed as a result of new environmental regulations regarding emissions, which require that all commercial vehicles produced from January 2012 onwards have Euro V engines. This created an anticipated demand effect from its customers and fleet owners, triggering a new record for the Company in leaf spring sales, reaching 80,000 metric tons.
-As a result of strong sales and disciplined cost controls, EBITDA grew 38%. Similarly, the business unit maintained a 65% market share in leaf springs and 13% in coil springs, while sales of U-bolts, a key element used for securing commercial vehicle leaf spring to a rear axle, reached a record volume of 450,000 units.
-Additionally, the business unit was selected as the supplier of two new coil spring platforms, which will start production in 2012. This will result in a 7% points increase in market share by 2015, the year in which these new platforms will reach full production levels.
4) Brake business
-At the end of 2011, Rassini Brakes had sales of 96.2 million dollars, with a total machined volume of 5.6 million brake discs, and 1.1 million of other smaller automotive components of which 850,000 pieces were made of nodular iron and 250,000 pieces of gray iron. This production of brake discs and orders form major customers meant a market share of 12% in North America.
-The business unit won a supply agreement to supply balance shaft cassette in nodular iron, applied for Ford vehicles to Linamar, with estimated sales of 17 million dollars per year. On the other hand, negotiations were finalized with Luk (Schaeffler Group) to supply pressure plates in gray and nodular iron with estimated annual sales of 3 million dollars.
R&D Structure-The Company holds an engineering, research and development centers in Plymouth, Michigan, USA.
Product DevelopmentsWeight Saving
-The engineering group developed advanced engineering materials and processes that reduce component weight by 30% for brake and suspension systems. These technologies have already been tested and approved by customers to be launched in 2013 vehicles.
Investment Outside Mexico<Brazil>
-Continuing with the investment plan in the coil spring facility, by the 4th quarter of 2010, the Company's subsidiary started production prototypes of high stress coils in a new, highly productive, state of the art coil line in the Sao Paulo plant.
-With a significant improvement sales forecasted for 2010, at the end of 2009 the Company restarted the installation of the coil spring line in Sao Paulo and the new parabolic leaf spring line in Rio de Janeiro. These expansions will allow the Company to meet the expected demand for 2010, with increased productivity and the latest technology.