Germany's Balda AG is aggressively expanding its manufacturing of mobile phone components in Asia, with plans to launch production in India next quarter, on the heels of opening a factory in Beijing and posting strong, steady growth in its Suzhou, China, operations.
Balda officials outlined their plans in an April 25 tour of the molding and mold-making facilities in Suzhou, about 35 miles northwest of Shanghai, and a follow-up interview three days later at the Chinaplas trade show in Shanghai.
Ralf Ackermann, chief technology officer and board member for the Bad Oeynhausen, Germany-based firm, said Balda formed a joint venture a couple months ago with Sumi Motherson Group, an Indian automotive parts injection molder. He said Balda controls 60 percent of the venture in Chennai, India, and expects to begin production of cell phone components by this fall.
Ackermann said the partners plan to make several key decisions soon about how to move the venture forward. Among them is whether they will build a plant or launch production in an existing Sumi Motherson factory in Chennai. He said the new venture initially will produce telecommunications components, mostly handsets, and will do not only molding but also surface treatment (printing, painting, and in-mold decorating and labeling) and assembly. The diversified Motherson group, founded in 1975, now has 12,000 employees, sales exceeding $350 million, and describes itself as India's ``largest manufacturer of automotive wiring harnesses and one of the largest plastic components suppliers to the automotive and consumer electronics industries.'' Its Web site says the company operates more than 300 injection molding machines, ranging in clamping force from 20-3,000 metric tons. The group also does blow molding and compression molding, and makes some of its own tooling.
Beijing in full swing
Meanwhile, Balda ramped up in April for mass production at its new 20-press Beijing plant to serve customer Sony Ericsson. The 258,000-square-foot facility can accommodate up to 60 injection molding machines, according to Ackermann. The site is running Krauss-Maffei and Arburg presses, and is equipped with a Wittmann centralized materials-handling system.
Balda acquired and modified an existing building last year and also built new office space. It expects to employ 800-1,000 workers in Beijing by year's end. The plant includes a paint line with three painting booths and has space to add a second paint line.
Two years ago Balda diversified into medical and automotive markets in Europe, because its cell phone business there began shifting to Asia.
``We see a big opportunity there,'' Ackermann said of those market sectors. ``We can apply our expertise in molding and surface treatment for the telecom market to the medical and automotive sectors, as well.'' The company, which has focused on the cell phone market since 1995, now does medical molding only in Germany.
Balda - which currently employs close to 8,500 - this month also is adding production of interior automotive components in Suzhou and expects that sector to account for about 5 percent of its output from that facility by year's end. It previously did its only automotive molding in Germany.
But it's the cell phone business that is really driving the growth at Balda. The 98-year-old firm, which operates more than a dozen plants worldwide, is following customers such as Sony Ericsson, Siemens, Motorola, Nokia and Alcatel to developing markets in Asia.
The firm now employs 2,800 in its two Suzhou plants alone and has increased its injection molding capacity there significantly over the past three years. Balda Solutions (Suzhou) Ltd. operates 79 standard molding machines there, along with another couple dozen presses that are equipped to do in-mold decorating in a Class 100,000 clean-room environment. The 6-year-old BSSL has seen sales more than triple, to 1.05 billion yuan ($128.3 million) last year from 300 million yuan ($36.3 million) in 2003, according to Chief Financial Officer Sven Schopp.
Beyond China, India
Balda's reach into Asia doesn't stop at China and India. The firm also has a major operation in Ipoh, Malaysia. That began as a research and development center to serve the entire group. It now includes a production plant and tooling center, employing about 1,500. That unit develops and manufactures headsets for cellular phones and other telecom devices.
Ackermann noted that Balda and its partner in mid-2005 dissolved the Albea Technologies LLP joint venture that it had been operating with MGS Manufacturing Group in Germantown, Wis., and he said his firm has no further U.S. plans now. But Balda's 2-year-old, 50-50 joint venture with a German partner in Brazil continues to go strong.
Overall, Balda AG reported in late March that net income last year grew 19.2 percent to 33.4 million euros ($41.6 million) on 5.2 percent higher sales of 397.2 million euros ($494.7 million).
Joachim Gut, chairman of the executive board, said he expects the group to achieve organic sales growth of about 15 percent this year, with 2006 pretax earnings between 46 million euros and 48 million euros ($59.1 million and $61.7 million). Gut added that Balda plans to invest about 33 million euros ($42.4 million) this year, which Ackermann said includes the Beijing and Chennai projects.