German auto supplier Benecke-Kaliko AG is set to build its second Chinese facility, in Changzhou, to produce surface materials for automotive interiors.
The company, a subsidiary of Continental AG's ContiTech, said the investment would be almost 40 million euros ($50.4 million) for the first phase of the expansion, making it the largest investment in the company's history.
The foundation stone for the plant will be laid before the end of fall 2014 and production is scheduled to start in late 2015. The new Changzhou plant will have 24,000 square meters of shop floor space and up to 250 employees.
Benecke-Kaliko will make its Acella Eco surface materials at the facility for the Chinese automotive industry. The foam backed material is low in emissions and non-allergenic and can be used in seating and interior trim.
“There is strong growth in demand from automakers in China in particular for high-quality and, at the same time, environmentally compatible materials for automotive interiors,” said Chairman Dirk Leiss in a news release. “Automakers are thus meeting the wishes of car buyers, but also the Chinese government's aim of increasing the air quality in automotive interiors.”
The company said that if demand continues to grow, it will consider a second expansion phase at the Changzhou plant which would double production capacity.
Benecke-Kaliko, based in Hanover, Germany, said it intends on building and operating the new plant on principles of sustainability. The plant will have an environmental management system in accordance with the specifications of ISO 14001 and the EU eco-audit regulation.
The new plant will join the firm's existing operation in China, Benecke-Changshun Auto Trim, a joint venture between Benecke-Kaliko and its Chinese partner Jiangsu Changshun International Trading. The company recently spent 7 million euros ($8.8 million) to expand that plant in Zhangjiagang and in October 2013 launched production of its TEPEO foils material.