France's auto fuel-tank maker Inergy Automotive Systems is entering China with a bang, with plans to buy into a leading maker of blow molded fuel systems and more than double its Asian sales.
Inergy signed a memorandum of understanding Jan. 18 with China's State Development and Investment Corp. to buy a majority stake in Yangzhou Yapp Auto Plastics Parts Co. Ltd., a business that boasted 50 million euros ($62 million) in 2004 sales.
``Inergy's firm intention to achieve a successful deal is another demonstration of our rapid expansion strategy in Asia,'' said Pierre Lecocq, Inergy chief executive officer.
A Paris-based joint venture of Plastic Omnium SA of Paris and Solvay SA of Brussels, Belgium, Inergy had about $45 million in Asian sales in 2003, with production and research and development in South Korea, Japan and Thailand. Its overall 2004 sales were 597.8 million euros ($744 million).
The purchase of Yapp would provide it with its first stake in China, where auto sales tripled between 2001 and 2004. Inergy executives announced last year that the firm would seek a ``majority stake'' in a Chinese firm. The deal should wrap up sometime in 2005, those executives said.
In 1994 Yapp produced 350,000 plastic tanks. It now claims to make half the fuel tanks produced in China, operating plants in nine cities. In 2001 Inergy provided technical support for Yapp's development of a tank for the Volkswagen AG Polo. Lecocq said he visited Yapp in 2003.
Like Inergy, Yapp is a joint venture - owned by China's SDIC and automaker Shanghai Automobile Industry Co. Ltd.