CAMBRIDGE FORMS GERMAN VENTURE

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MADISON HEIGHTS, MICH. — Cambridge Industries Inc. has formed a 50-50 joint venture with German automotive supplier Menzolit-Fibron GmbH that gives both companies wider access to carmakers in overseas markets.

Both Cambridge and Menzolit-Fibron are large producers of automotive parts primarily made from sheet molding and bulk molding compounds and glass-mat thermoplastic composites.

The joint venture allows the companies — considered to be among the leading SMC automotive parts suppliers on each side of the Atlantic — to manufacture and sell each other's products in their respective markets. The suppliers also plan to share new technologies and design and engineering expertise. Financial terms were not disclosed.

The companies plan to team up to design and supply parts for automakers' new production platforms. Cambridge will take the lead role in supplying design expertise and products for the North American market, while Menzolit-Fibron will do the same for Europe.

In addition, the companies plan to work together to develop new materials in thermoplastics composites, said Peter Herrmann, vice president of international. Both companies recently have been working on new technology in glass-mat thermoplastics, he added.

Cambridge, based in Madison Heights, makes a variety of interior, exterior and functional automotive components at 15 plants in the United States and Canada. The company, which employs 4,000, recorded 1996 sales of $400 million. About $250 million of that comes from parts that are compression molded from SMC and BMC composites, the company reported.

Cambridge expanded a year ago when it purchased Fairlawn, Ohio-based GenCorp Inc.'s automotive SMC business for an undisclosed amount.

The acquisition added plants in Indiana and Michigan and an SMC production facility in Marion, Ind.

Menzolit-Fibron, based in Bretten, Germany, employs 1,360 at seven plants — four in Germany and one each in France, Slovakia and Turkey.

The company, which recorded sales last year of about $225 million, claims to provide more than 30 percent of SMC and BMC components for the European automotive market.

The European firm also owns minority stakes in Inapal Plastics SA of Porto, Portugal; Senres AS of Istanbul, Turkey; and Ercom Composite Recycling GmbH of Rastatt, Germany. Menzolit-Fibron has an SMC production center in Kraichtal-Gochsheim, Germany.

The venture gives both companies a decided advantage in working with automakers rolling out new programs globally, Herrmann said. Carmakers are asking that suppliers provide a local presence to save time and costs, he added.

``To grow, we have to be committed to Europe and other parts of the world,'' Herrmann said. ``Rather than open a new operation there, it made more sense to utilize a strong partner in the areas we want to penetrate. That way, we don't have to spend the capital to move into a region not familiar to us.''

Cambridge is not the first North American SMC supplier to form a European joint venture. Last year, the Plastics Division of Eagle-Picher Industries Inc. of Cincinnati formed a similar partnership with Polynorm Roosendaal, a supplier in Roosendaal, the Netherlands.

Coincidentally, Eagle-Picher just announced that it is selling its Plastics Division.

The need to move into European markets is necessary to compete, said Donna Parolini of International Business Development Corp., an automotive consulting firm in Troy, Mich. Parolini estimated that 95 percent of North American Tier 1 suppliers have some presence overseas.

``Automakers want to see that a supplier is capable of following them to other countries,'' Parolini said.

``Opening new plants is just part of the equation. The industry also wants to see that suppliers have a global awareness worldwide and can use that knowledge base to do business effectively,'' she said.

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