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

Unipex Group buys Ferguson Chemical Innovation

July 29, 2014 1:57 pm ET

Chemical distributor Unipex Group Inc. announced July 29 that it had purchased Ferguson Chemical Innovation, a Brampton, Ontario-based supplier of...    More

Image

Magna expanding interiors site in Slovakia

July 29, 2014 1:47 pm ET

Magna International Inc. plans to nearly double the size of its manufacturing facility in Trnava, in western Slovakia, to accommodate new automotive...    More

Image

Universal Polymer beefing up capabilities through acquisition

July 29, 2014 12:04 pm ET

Universal Polymer & Rubber Ltd. is growing again and adding to its capabilities, this time via another acquisition and a plant expansion.    More

Image

Reynolds considering sale of Closure Systems International unit

July 29, 2014 10:32 am ET

Packaging giant Reynolds Group Holdings Ltd. has put its closures business under review.    More

Image

Carbon black supplier Orion begins trading on NYSE

July 29, 2014 11:29 am ET

Orion Engineered Carbons S.a.r.l. has priced the initial public offering of 19.5 million common shares at a price to the public of $18 per share.    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

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

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

More Events