Nemak S.A. Business Report FY ended Dec. 2012
|(in million Mexican pesos)|
|FY ended Dec. 31, 2012||FY ended Dec. 31, 2011||Rate of Change
-The increase in sales was based on a sales volume of 42 million of comparable heads in the year, 14% more than in 2011. Part of the growth is explained from the acquisition of JL French, company in the aluminum parts business for automotive transmissions. Also, in the continuing trend to replace iron parts by other aluminum parts in automotive engines, as well as in the increase of sales of the Company's main clients. In Europe, in particular, sales were maintained in the performance of German assemblers, who demanded new programs and were successful in finding export markets for their vehicles.
Acquisition-In May 2007, the Company has entered into a definitive agreement to acquire Castech, a company in the same field of business that belongs to Grupo Industrial Saltillo, S.A.B. de C.V. (GISSA). The consideration amounts to 136 million dollars, comprised of 72 million dollars in cash and 64 million dollars in debt. Castech, a former Joint Venture between GISSA and Norsk Hydro, operates a state-of-the-art facility in the outskirts of Saltillo, Mexico, where it manufactures aluminum engine blocks and cylinder heads for customers in North America and Asia/Pacific. In 2006, Castech reported revenues of 180 million dollars.
-In November 2006, the Company acquired the outstanding shares of certain subsidiaries of TK Aluminum, Ltd. (Teksid), an Italian company. These subsidiary companies are engaged in the manufacture of high technology aluminum components for automotive industry, and operate in the USA, Brazil, Poland, Mexico, China and Argentina. The sales in 2005 was approximately 700 million US dollars.
-In an effort to strengthen its presence in the European market and to reduce its dependence on the North American market, the Company completed the acquisition of the German company Rautenbach. At the close of the year, 17% of Nemak's sales were already from auto makers other than the Big Three in the US.
-Rautenbach is well known for its technology leadership in the production of aluminum cylinder heads and other high-tech aluminum components targeted, mainly for the European automotive market. Within Wernigerode, Germany and Ziar, Slovakia, Rautenbach supplies Audi, VW, Skoda, Daimler-Chrysler, Porsche, BMW, Peugeot Citroen and SsangYong. During 2004, Rautenbach reported sales close to 175 million dollars and employed 900 people. Nemak's new plant in the Czech Republic will complement Rautenbach's casting facilities in Germany and Slovakia thus providing a stronger presence in the European market.
Contracts-In 2010, the Company obtained new production contracts. For example, a global program for VW and Audi, which will be produced in North America, Europe and Asia
-In 2009, the Company obtained 18 new contracts that represent future yearly revenues of 225 million dollars.
-In 2008, the Company worked on the production of 20 different block and engine head models for hybrid cars, which are supplied to assembly plants in North America and Europe.
-In 2008, the Company won 46 production contracts and launched 32 production programs.
-In 2007, the Company secured 18 new contracts for the production of aluminum parts. And the Company added new clients including Hyundai, Rotax, Cummins, Volvo and PSA.
-In 2006, the Company has been awarded the contract for the production of a new V6 engine block program to be produced at the Canadian facility in Windsor, Ontario. The new program involves an annual volume of 450,000 blocks for General Motor's vehicles to be sold worldwide.
-In 2006, the Company was selected by clients for additional programs in Europe, such as Volvo and Opel. In addition, Peugeot selected the Company to produce in Mexico a cylinder head that will be exported to Brazil and Argentina.
-During 2005, the Company won a contract to supply engine blocks (destined for General Motors), which will be manufactured in Canada.
-In July 2005, the Company announced it was chosen by Hyundai Kia to supply cylinder heads for two new four-cylinder engines, one gasoline-fired and the other diesel-fired, for vehicles to be sold in the European market. The new contracts are for a total of 330,000 aluminum heads per year to be produced by end-2006 in Nemak's facilities in Europe. Hyundai Kia will produce the new engines in its Zilina, Slovakia plant.
-In 2005, the Company won 11 new contracts.
R&D Structure-The Company has seven world-class Product Development Centers, strategically located in Austria, Canada, Germany, Mexico and Poland.
-The Company is capable of developing more than 100 new products yearly while operating at full capacity.
Technological Development-The LPPM (Low-Pressure Permanent Mold) and LPPS (Low-Pressure Precision Sand) processes for the manufacturing of aluminum cylinder heads and blocks, respectively, paved the way for a more efficient operation as well as higher quality products at the Company, and constitute two cutting-edge technologies in its industry.
|(in million Mexican pesos)|
|FY ended Dec. 31, 2012||FY ended Dec. 31, 2011|
-In 2012, the investments were used to modernize the plants and increase the capacity of some of them, especially in Mexico and Asia.
-In 2010, the Company began construction of an auto parts plant in Chennai, India. This plant will join the one existing in China to increase its presence in Asia.
-In 2009, to address the economic situation, the Company concentrated its investments in key improvement projects and in new production programs that began during the year despite the crisis. The amount invested in fixed assets during the year amounted to US $78 million.
-In 2007, in order to meet the capacity needs resulting from new contracts, the Company continued to invest in the organic growth of its plants in Mexico, Canada, and Europe and allocated resources of 157 million dollars.
-In FY2006, resources are allocated to the construction of a new plant in Mexico and the expansion of another in Canada, both of which will increase production capacity in engine blocks for the American market. Likewise, resources were invested in expanding engine head capacity in Europe.
-In FY2005, investments were made to acquire Rautenbach, increase production capacity to satisfy the demand from existing contracts, and improve operating efficiency in the plants.