A leading Japanese manufacturer has joined a joint venture with Sandusky Ltd. in Sandusky, Ohio, to create one of the world's largest suppliers of thermoplastic trim materials for the automotive industry.
Kyowa Leather Cloth Co. of Hamamatsu, Japan, will be the third partner in a global joint venture originally announced in March 1996. The agreement represents the first North American expansion for the material supplier, which produces vinyl and thermoplastic olefin trim materials for Japanese automakers.
The other joint venture partners are Sandusky, a North American supplier of vinyl coated textiles, unsupported expanded vinyl and composite trim products, and Benecke-Kaliko AG, a manufacturer of automotive interior trim materials based in Ettlingen, Germany.
The venture is centered at Sandusky's 300,000-square-foot plant, where technology and production will be transferred from the three companies.
The Sandusky, Ohio, plant is in the midst of a major expansion to support the joint venture, said Sandusky Chairman John Givens. The company expects to spend between $12 million and $15 million in the next three years to increase plant capacity
Sandusky's holding company, Eastar Inc., already has spent $16 million to upgrade the plant after it acquired the firm in 1992 from Chrysler Corp. of Auburn Hills, Mich.
Among the new acquisitions have been a new cast coating line and post-embossing calendering line, Givens said.
Plant size has expanded by 30 percent, and the firm added 140 workers since the buyout from Chrysler. The plant, which now has 255 employees, performs calendering, coating, extruding, laminating and several printing and finishing processes.
Sandusky changed its name from Sandusky Vinyl Products Corp. in October after Benecke purchased an equity interest.
Benecke already has begun exporting materials to Sandusky for processing, Givens said. The company exports $20 million annually in trim materials to the United States.
Kyowa recently bought a 10 percent equity interest in Sandusky, a closely held company. In October, Benecke purchased a 14 percent stake.
The equity price was not disclosed for either company.
Although Eastar now owns 76 percent of the company, Benecke and Kyowa have the option to buy a larger share, according to Givens.
The joint venture represents the first expansion in North America for Kyowa, which Givens said supplies more than half the automotive trim materials for the Japanese market. The publicly held company, which has 800 employees, recorded 1996 sales of $235 million.
Kyowa's largest shareholder is Toyota Motor Corp., which owns 30 percent of it.
Kyowa operates five plants, all near Hamamatsu. The company is known for its thermoplastic olefin technology to replace vinyl skins and the development of composite materials for instrument panels and door panels, Givens said.
Sandusky hopes to capitalize on that technology in North America and also attract a larger share of the market from U.S. transplant companies coming from Japan, Givens said.
``As the industry globalizes, we need to support customer demands in different markets, whether it's in Japan, Europe or the United States,'' Givens said. ``With our equity arrangement, we can serve all these markets.''
The agreement joins the technology of three of the leading material trim suppliers worldwide.
Sandusky's sales have doubled to $70 million in 1996 since it was acquired by Eastar. Its trim and convertible topping materials primarily are used by suppliers to Big Three carmakers.
The company also makes trim materials for the marine, transportation and construction industries.
Benecke, which employs 2,200, recorded 1996 sales of $430 million. The company is the leading European manufacturer of trim materials for the automotive market. Its primary North American customers include Ford Motor Co. and Volkswagen of America Inc.
Benecke, which has plants in Ettlingen and Hannover, Germany, also makes vinyl materials for furniture, book bindings and other markets.