Austem Co., Ltd. Business Report up until FY ended Dec. 2013
Business Highlights
Highlights in Recent Years
-In August 2013, the Company announced that it has supplied approximately KRW 2,700 million worth of front cradles and rear axles to General Motors Indonesia. This amount account for about 10.4 percent of the KRW 25,987 million contract, which covers the period between August 2012 and December 2017. (From a press release, August 30, 2013)
-The Company was awarded a contract from GM Korea to supply aluminum front cradles. The contract, which is from June 2012 until January 2019, is valued at 63,931 million won. (From a June 7, 2012 press release)
-The Company won a contract from GM Europe to supply automotive parts. The agreement, which is for a period between November 2011 and May 2018, is expected to generate 183,475 million won in sales. (From a press release on December 1, 2011)
-The Company won a contract from GM Korea and GM Thailand to supply automotive parts. The agreement, which is for a period between November 2011 and March 2021, is expected to generate 83,171 million won in sales. (From a press release on November 30, 2011)
-The Company won program business from GM Korea. Under the agreement, Austem will supply aluminum front cradles to GM Korea during the period between June 2011 and January 2019. The program is expected to generate 63,931 million won in sales, which is equivalent to about 34.8 percent of the company's annual revenue for 2010 (183,475 million won). (From a press release on June 9, 2011)
-The Company won program business from GM Korea. Under the agreement, Austem will supply rear axles to GM Korea during the period between September 2013 and December 2017. The program is expected to generate 47,617 million won in sales, which is equivalent to about 25.9 percent of the company's annual revenue for 2010 (183,475 million won). (From a press release on May 20, 2011)
-The Company has won program business from CT&T, a Korea-based electric vehicle manufacturer. Under the agreement, it will supply front lower arm assemblies for the e-Zone model between November 2010 and October 2013. The new business is expected to generate 3,456 million won in sales. (From a press release, Oct. 27, 2010)
-The Company will supply front cradles and rear axles to GM Indonesia between August 2012 and December 2017. The business is expected to generate 25,987 million won in sales, which is equivalent to about 20.7 percent of the company's annual revenue for 2009 (125,574 million won). (From a press release on Oct. 21, 2010)
-The Company will supply front cradles and rear axles to GM Uzbekistan between October 2012 and December 2017. The business is expected to generate 100,532 million won in sales, which is equivalent to about 80.1 percent of the company's annual revenue for 2009 (125,574 million won). (From a press release on Oct. 21, 2010)
-The Company has won program business from GM-Daewoo. Under the agreement, Austem will supply front cradles to GM-Daewoo between June 2012 and December 2016. The contract is expected to generate 30,141 million won in sales, which is equivalent to about 24 percent of the company's annual revenue for 2009 (125,574 million won). (From a press release on Apr. 22, 2010)
-In Sep. 2008, the Company was awarded a contract to supply seat components to GM Daewoo. The contract, which covers the period between 2010 and 2014, is expected to add 169,610 million won to the company's revenue during these five years. (From a press release on Sep. 24, 2008)
-In Sep. 2008, the Company won program business from General Motors to produce Gamma steel wheels. Between 2010 and 2014, the company will supply 4.02 million steel wheels to General Motors North America (GMNA) in Mexico; and General Motors Brazil (GMB). This new business award is expected to add 64 million US dollars to the company's revenue over the five-year period. (From a press release Sep. 10, 2008)
-In Aug. 2008, the Company was awarded a contract from GM Daewoo to supply rail assemblies for the T300 project. Austem will supply 4.93 million rail assemblies to the automaker from 2010 through 2014. The five-year program is worth 81,858 million won in sales. (From a press release on Aug. 8, 2008)
- In Dec. 2007, the Company began supplying functional seat components for use in Hyundai Genesis luxury sedans. By providing these products to Dymos, a seat supplier of the Hyundai Group, the company expects that this award will generate sales of 24 billion won.
- In Sep. 2006, the Company was awarded a contract to supply front cradles and rear axles for the GM Delta2 project. The Delta2 is the successor model to the Lacetti.
Awarded programs:
New business
Financial Overview (Consolidated) |
(in millions of won) |
| FY ended Dec. 31, 2013 |
FY ended Dec. 31, 2012 |
Rate of change (%) |
Remarks | |
| Sales | 254,979 | 240,296 | 6.1 | - |
| Operating income | 12,395 | 13,227 | (10.1) | - |
| Net income | 10,021 | 9,345 | 7.2 | - |
Subsidiaries
<Uzbekistan>
-The Company and an Uzbek state-owned company O'zavtosanoat will establish a 50-50 joint-venture called O'zauto-austem in Uzbekistan. The 557 million won venture will produce chassis components, supplying them to GM Uzbekistan, in which O'zavtosanoat owns the majority share. (From a press release on January 18, 2011)
<China>
-In January 2013, the Company announced that it would establish POS-AUSTEM Yantai Automotive Co., Ltd. in Yantai, Shandong Province, China to produce automotive components for Shanghai GM’s Yantai Plant. The new company will be capitalized at 10,547 million won, of which 80.1 percent will be provided by Austem, 11.44 percent by POSCO-China Holding Corp, and 8.46 percent by POSCO (Yantai) Automotive Processing Center Co., Ltd. (From a press release, January 14, 2013)
-The Company and POSCO, Korea's leading steel company, established a joint-venture company, POS-Austem Suzhou Automotive Co., Ltd. in Kunshan, China. The new joint venture was established under the idea of ensuring there is enough production capacity to respond to orders for parts placed by Shanghai GM and of further developing the auto parts market in China. The new entity is capitalized at 11,588 million won, of which 80.1 percent or 9,282 million won was provided by Austem. POSCO-China Holding Corp., the Chinese unit of the POSCO Group invested 10.0 percent, while POSCO Automotive Processing Center Co., Ltd. Supplied 9.9 percent. (From a press release on Jan. 11, 2008)
<Korea>
-The Company announced that it will absorb its two wholly owned subsidiaries, ACM and Seatek, effective December 28, 2013. ACM produces and sells chassis modules, while Seatek produces and sells seat components. (From a press release on October 25, 2013)
Contracts
-In October 2013, the Company announced that it is supplying front cradles and rear axles to GM Uzbekistan. The company has already delivered products worth KRW 11,100 million, which accounts for 10.9 percent of the contract valued at KRW 100,532 million. The agreement covers the period between August 2012 and December 2017. (From a press release on October 30, 2013)-In August 2013, the Company announced that it has supplied approximately KRW 2,700 million worth of front cradles and rear axles to General Motors Indonesia. This amount account for about 10.4 percent of the KRW 25,987 million contract, which covers the period between August 2012 and December 2017. (From a press release, August 30, 2013)
-The Company was awarded a contract from GM Korea to supply aluminum front cradles. The contract, which is from June 2012 until January 2019, is valued at 63,931 million won. (From a June 7, 2012 press release)
-The Company won a contract from GM Europe to supply automotive parts. The agreement, which is for a period between November 2011 and May 2018, is expected to generate 183,475 million won in sales. (From a press release on December 1, 2011)
-The Company won a contract from GM Korea and GM Thailand to supply automotive parts. The agreement, which is for a period between November 2011 and March 2021, is expected to generate 83,171 million won in sales. (From a press release on November 30, 2011)
-The Company won program business from GM Korea. Under the agreement, Austem will supply aluminum front cradles to GM Korea during the period between June 2011 and January 2019. The program is expected to generate 63,931 million won in sales, which is equivalent to about 34.8 percent of the company's annual revenue for 2010 (183,475 million won). (From a press release on June 9, 2011)
-The Company won program business from GM Korea. Under the agreement, Austem will supply rear axles to GM Korea during the period between September 2013 and December 2017. The program is expected to generate 47,617 million won in sales, which is equivalent to about 25.9 percent of the company's annual revenue for 2010 (183,475 million won). (From a press release on May 20, 2011)
-The Company has won program business from CT&T, a Korea-based electric vehicle manufacturer. Under the agreement, it will supply front lower arm assemblies for the e-Zone model between November 2010 and October 2013. The new business is expected to generate 3,456 million won in sales. (From a press release, Oct. 27, 2010)
-The Company will supply front cradles and rear axles to GM Indonesia between August 2012 and December 2017. The business is expected to generate 25,987 million won in sales, which is equivalent to about 20.7 percent of the company's annual revenue for 2009 (125,574 million won). (From a press release on Oct. 21, 2010)
-The Company will supply front cradles and rear axles to GM Uzbekistan between October 2012 and December 2017. The business is expected to generate 100,532 million won in sales, which is equivalent to about 80.1 percent of the company's annual revenue for 2009 (125,574 million won). (From a press release on Oct. 21, 2010)
-The Company has won program business from GM-Daewoo. Under the agreement, Austem will supply front cradles to GM-Daewoo between June 2012 and December 2016. The contract is expected to generate 30,141 million won in sales, which is equivalent to about 24 percent of the company's annual revenue for 2009 (125,574 million won). (From a press release on Apr. 22, 2010)
-In Sep. 2008, the Company was awarded a contract to supply seat components to GM Daewoo. The contract, which covers the period between 2010 and 2014, is expected to add 169,610 million won to the company's revenue during these five years. (From a press release on Sep. 24, 2008)
-In Sep. 2008, the Company won program business from General Motors to produce Gamma steel wheels. Between 2010 and 2014, the company will supply 4.02 million steel wheels to General Motors North America (GMNA) in Mexico; and General Motors Brazil (GMB). This new business award is expected to add 64 million US dollars to the company's revenue over the five-year period. (From a press release Sep. 10, 2008)
-In Aug. 2008, the Company was awarded a contract from GM Daewoo to supply rail assemblies for the T300 project. Austem will supply 4.93 million rail assemblies to the automaker from 2010 through 2014. The five-year program is worth 81,858 million won in sales. (From a press release on Aug. 8, 2008)
- In Dec. 2007, the Company began supplying functional seat components for use in Hyundai Genesis luxury sedans. By providing these products to Dymos, a seat supplier of the Hyundai Group, the company expects that this award will generate sales of 24 billion won.
- In Sep. 2006, the Company was awarded a contract to supply front cradles and rear axles for the GM Delta2 project. The Delta2 is the successor model to the Lacetti.
Awarded programs:
| Products | GM Shanghai | GM Daewoo (Currently GM Korea) |
Projected |
| Front cradle assemblies | 345,000 sets | 250,000 sets | 30.3 billion won |
| Rear axles | - | 250,000 sets | 20.4 billion won |
New business
-The Company has launched operations in the ceramics business by acquiring 74.2 percent of the shares of stock issued by KhanCera Co., Ltd. (a manufacturer of diesel particulate filters (DPFs) in Korea) and turning the company into a subsidiary. KhanCera was established by former researchers at LG Chem Ltd. in 2008 to promote local production of ceramic filters in Korea. KhanCera's headquarters is located in the Daejeon Metropolitan City. (From a press release on Aug. 24, 2010)
R&D
R&D Structure
-The Company operates a technical research center in Incheon.
-The Company conducts development activities at its technical center, which consists of three teams: seat designing team; chassis designing team; and a research team for advanced technology.
R&D Expenditure (Consolidated) |
(in millions of won) |
| FY ended Dec. 31, 2013 |
FY ended Dec. 31, 2012 |
FY ended Dec. 31, 2011 |
|
| Amount | 2,481 | 3,438 | 3,959 |
| % of Sales | 1.0 | 1.4 | 1.8 |
Recent Development Activities
-The Company was selected as a participant in the "World Premier Materials (WPM)" project run by the Korean Ministry of Knowledge Economy. The objective of this program is to develop and turn 10 new materials into practical business solutions. It was selected to lead the development of new steel plates based on aluminum-magnesium. The period of this development project is from September 2010 through August 2019. The Company is planning to invest 1,530 million won in this project, of which 1,275 million won will be provided by the Korean government. (From a press release on Sep. 17, 2010)-Hydro-forming molding technology, created with technical assistance from HDT of the U.S.A., was adopted by Daewoo for the carmaker's Magnus and Rezzo.
-The Company developed ultra-light wheels. Since 2004, the Company has provided 500,000 of these wheels to GM based on a five-year supply award it won from the carmaker.