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5. Georg Fischer AG Business Report up until FY ended Dec. 2014

Georg Fischer AG Business Report up until FY ended Dec. 2014

Factors
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-In FY ended Dec. 2014,　sales of GF Automotive fell by 5.5% from a year earlier owing to the divestment of its gravity die-casting operations in Austria and, also because the basic metal price decreases were passed on to customers.

Acquisitions

-In July 2014, the Company acquired 51% of the capital of Meco Eckel GmbH, Biedenkopf-Wallau (Germany). Meco Eckel is a mold specialist and leading German manufacturer of pressure die-casting molds. It generated sales of approximately CHF 43 million for FY ended Dec. 2013 with 130 employees. It has another facility in Leipzig (Germany). The partnership with Meco Eckel GmbH means contact early on for designing casting and quicker processes for implementing designs in production.

Divestitures

-In January 2014, GF Automotive is to divest its non-core gravity die-casting business in Herzogenburg (Austria) to the present managers in the framework of a management buyout. The transaction allows GF Automotive to fully focus on its core iron sand casting and light metal high pressure die-casting activities. The deal takes effect retroactively on January 1, 2014. The transaction will result in a decrease in the annual sales of GF Automotive of approximately CHF 70 million (USD 77.3 million). The gravity die-casting business in Herzogenburg is specialized in manufacturing aluminum cast components for the passenger vehicle and truck industry. The company employs about 200 people. There are two other plants at GF Herzogenburg, iron casting and aluminum pressure die-casting, which are not affected by the transaction. (From a press release on January 31, 2014)

Contracts

-In June 2013, GF Automotive received a major order for over CHF 400 million (approximately EUR 325 million) from Audi. The light structural parts for the German car manufacturer will be produced by aluminum pressure die casting in Europe and China starting in the next few years. The order comprises suspension strut domes, which will be built into several new Audi models and replace conventional welded sheet metal assembling. The new design features a better functionality and a much lower number of components resulting in a weight reduction of over 50%. (From a press release on June 10, 2013)

-In April 2013, GF Automotive received a major order for over CHF 380 million (approximately EUR 309 million) from a European truck manufacturer. The serial production starts in the current quarter. The order involves chassis and engine parts made of iron alloys in lightweight design. The more than 20 parts constituting the order will be produced in the iron foundries in Singen (Germany), Mettmann (Germany) and Herzogenburg (Austria). (From a press release on April 23, 2013)

Business Partnership

-In August 2013, the Company and Riken Corporation have signed a license and partnership agreement on July 1 regarding Riken's use of the Swiss company's "SiboDur," an iron alloy. The Japanese automotive parts supplier is now licensed to manufacture and sell the material in Japan and ASEAN countries. This will allow the company to make thinner and lighter products by using SiboDur to optimize specific parts. The two companies intend to promote mutual use of their production sites and establish a flexible supply network to correspond with their customers' individual needs in the global market. (From an article in the Nikkan Jidosha Shimbun on August 22, 2013)

R&D Structure

-The R&D centers of GF Automotive are concentrated in Schaffhausen (Switzerland) and Suzhou (China).

R&D Activity

-In 2013, the Company developed rear axles for DAF new "XF" with ZF, which was nominated as rear-axle module supplier. The new rear-axle module alone is almost 70 kilograms lighter, helping to reduce diesel consumption and CO2 emissions.

Investment Outside Switzerland

-In January 2014, GF Automotive announced that its Singen (Germany) plant is to be equipped with a modern iron castings molding line for the production of lightweight components for trucks. Construction will start this year, and the new facility will go into operation at the end of 2015. The total investment in the next two years amounts to EUR 55 million. The new line, with an annual output of 100,000 tons of ductile iron castings, will replace two existing facilities that have been in operation for more than 30 years. The Singen production plant employs a workforce of approximately 1,000 with a production capacity of 200,000 tons of ductile iron castings. (From a press release on January 16, 2014)

-In September 2012, GF Automotive announced that, following investments of some EUR 36 million in a 13-month building project, it inaugurated a new iron foundry in Mettmann, Germany. The new plant has a capacity of up to 60,000 tons of nodular cast iron; total production capacity in Mettmann is around 200,000 tons. At the Mettmann plant, GF Automotive manufactures chassis parts, rear axle housings and crankshafts for passenger and commercial vehicles. Light weight components from GF Automotive are used in the new Audi "A3" or the VW "Golf". They help save more than 25% in weight compared to conventional ones. (From a press release on September 27, 2012)


-In January 2015, GF Automotive is increasing its manufacturing footprint in China by 50%. The division completed end of 2014 the extension of its iron foundry in Kunshan (Jiangsu Province) for a capacity increase of 50%. It is also building its fourth light metal facility in Suzhou (Jiangsu Province) to add up 50% more capacity in this plant by the end of 2015. The ongoing investments of GF Automotive, amounting to more than CHF 40 million, aim at addressing the growing demand for locally produced lightweight structure and powertrain components. With these new investments, more than 20% of the turnover of GF Automotive will be realized in China. (From a press release on January 30, 2015)

-In November 2012, GF Automotive will further enlarge its existing plants in China and focus in Europe on its iron and aluminum die-casting foundries. In China, the local demand will require an increase in the production capacity of the two existing iron and aluminum die-casting foundries of approximately 40% within the next two years. In Europe, the aluminum sand casting business with two foundries in Friedrichshafen and Garching, Germany, will be divested to the company MWS Group, an Austrian automotive supplier. The foundries of Friedrichshafen and Garching belong to Georg Fischer since 1999 and employ 250 and 180 persons respectively. They are both specialists in aluminum sand casting for passenger cars, commercial vehicles and industrial applications. Their combined sales in 2011 were CHF 127 million, approximately EUR 105 million. (From a press release on November 29, 2012)