Germany's ZF discusses sale of rubber and plastics unit to Chinese firm

David Vink
PLASTICS NEWS CORRESPONDENT

Published: August 26, 2013 3:00 pm ET
Updated: September 5, 2013 1:36 pm ET

Related to this story

Topics Automotive, Mergers & Acquisitions, Injection Molding

ZF Friedrichshafen AG, Germany's third largest automotive supplier and among the top 10 worldwide, has confirmed reports that it is in the early stages of discussions to sell its rubber and plastics (R&P) department.

A local newspaper Neue Osnabrücker Zeitung (NOZ), revealed Aug. 22 that ZF is looking "very closely" at a specific offer from the Chinese railway products company Zhuzhou Times New Material Technology Co. Ltd. (TMT).

According to that report, ZF chief Stefan Sommer disclosed TMT's interest at an Aug. 22 meeting attended by 800 employees in the ZF R&P headquarters plant in Damme, Germany.

TMT supplies rubber and metal suspension materials for train and other track transport systems, as well as for wind power plants. Sommer maintained that TMT products complement ZF's R&P products in terms of market, customer and regional perspectives, stressing that TMT wants to set foot in Europe.

In a press statement last week and earlier in the ZF annual report, the company has expressed dissatisfaction with returns at R&P. ZF has said following consolidation in the market, competitors have cost advantages and more flexible structures than ZF.

Jürgen Weller of the IG Metall trade union told the General Anzeiger newspaper that ZF's rubber and plastics business is profitable, "but are not as high as ZF wants. But that is due to the rubber parts being dependent by nature on rubber prices."

NOZ reported that ZF's R&P department has around 3,400 employees worldwide and 2012 sales of 718 million euros ($960 million), up 6 percent from 2011. Company-wide, ZF has almost 74,000 employees.

ZF R&P has 1,700 employees in three German plants: Bonn, where its has R&D, Damme and Simmern. A ZF spokesman said the company has invested almost 30 million euros in the past three years to expand the Damme plant, where about 1,000 employees make items such as rubber and plastic connectors, airbag housings, servo pump oil containers, plastic composite pedals, hydraulic supports for engines, as well as components for gear-changing and steering systems.

He was clearly attempting to overcome concerns among staff that TMT would close down the German plants. He suggested ZF's investment "is definitely different to other company acquisitions in Germany and Europe, where the old owner lets a location bleed before it is taken over by investors."

Nevertheless, staff expressed concerns that, as ZF itself has set up a R&P production site in China, TMT may be seeking German know-how just in order to develop further in China. A sale would require the R&P business to be firstly split off from ZF into a separate company and even if staff are retained, concerns were expressed by staff about retention of their ZF company pension rights and central pay agreements.

Thorsten Gröger from the IG Metall trade union in Nienburg-Stadthagen said, "we consider the whole thing with much skepticism. If the future prospects for R&P are very good in the hands of an investor, they should also be so under ZF, in the view of the employees."

TMT is listed on the Shanghai stock market and is a subsidiary of state-owned CSR Corp. TMT employs around 2,700 people and achieved sales of 457 million euros in 2012, up from 422 million euros in 2011.

Aside from the three German plants, ZF has R&P operations in Hebron, Ky.; Sorocaba, Brazil; Shanghai; Trnava, Slovakia; and Melbourne, Australia.


Comments

Germany's ZF discusses sale of rubber and plastics unit to Chinese firm

David Vink
PLASTICS NEWS CORRESPONDENT

Published: August 26, 2013 3:00 pm ET
Updated: September 5, 2013 1:36 pm ET

Post Your Comments


Back to story


More stories

Image

Sabic: Rapid demand growth led to Ultem shortage

December 18, 2014 12:06 pm ET

Sabic Innovative Plastics has been increasing production capacity for its Ultem polyetherimide but it still got caught short by increasing demand for ...    More

Auto supplier M-Tek relocating headquarters

December 18, 2014 3:37 pm ET

M-Tek Inc., a subsidiary of Japanese automotive supplier Kasai Kogyo Co. Ltd., will build a new North American corporate headquarters in Murfreesboro,...    More

Image

Amcor buys Chinese flexible packaging plant

December 18, 2014 1:47 pm ET

Australian-based global packaging company Amcor Ltd. is buying a Chinese flexible packaging business for 211 million RMB (US$31.4 million).    More

Image

Indian auto parts maker set to buy assets in Germany, Mexico

December 18, 2014 10:35 am ET

Indian auto parts maker Samvardhana Motherson Gropup is buying the assets of insolvent German plastics car parts producer Scherer & Trier (S&T).    More

Image

Sweden's Indutrade buys Belgian packaging firm Verbeek

December 18, 2014 9:42 am ET

Sweden's Indutrade AB has purchased all the shares in Belgium's Verbeeck Packaging Group.    More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events