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 Mergers & Acquisitions, Automotive, 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

Mission Plastics brings new automated work cell on line

August 26, 2014 4:17 pm ET

Custom injection molder Mission Plastics Inc. and a customer have created a $1.5-million automated work cell for a medical diagnostics product.    More

Image

Megadyne buying Belt Corp. of America

August 26, 2014 10:35 am ET

In a move aimed at building its specialty belting manufacturing and fabrication operations, Jason Industrial Inc. — Megadyne SpA's wholly owned ...    More

Image

Sonoco buys Germany's Weidenhammer, plans for thin-walled packaging growth

August 25, 2014 1:41 pm ET

Sonoco Products Co.'s acquisition of Weidenhammer Packaging Group GmbH of Germany includes plastic packaging technology that the company is targeting ...    More

Image

Deceuninck buys PVC window maker Pimas, adds capacity in Turkey, Russia

August 25, 2014 2:26 pm ET

European building products manufacturer Deceuninck Group has acquired 81.2 percent of Pimas Plastik Insaat Malzemeleri AS, the leading PVC window...    More

Image

New contract for JCI workers heads off potential strike in Ontario

August 25, 2014 3:17 pm ET

About 300 unionized workers at a Johnson Controls Inc. interiors plant in Ontario ratified a new three-year contract, heading off a potential strike a...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

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

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