Novi, Michigan – Cooper Standard Automotive Inc. continues its growth path in Asia-Pacific and is consolidating its position in the North American fuel and brake market.
The firm made a pair of moves, first agreeing to acquire the automotive fuel and brake business of AMI Industries for an undisclosed amount. Cooper Standard gets three plants in the deal – two in China and one in Indiana – plus other production to be transferred into Cooper's existing facilities from AMI's non-core manufacturing sites.
“We felt that this was a company that had done a very good job at growing their business from 2008 until now as an emerging competitor to us in the fuel and brake business,” said Keith Stephenson, Cooper Standard's chief operating officer. “We thought it was a good opportunity to consolidate that position, expand our position in China and strengthen our relationship with customers.”
Second, Cooper Standard celebrated the opening of its new India headquarters and technical centre in Pune, India, on 26 Aug. The firm did not disclose investment details, but it now operates 32 facilities in the Asia-Pacific region: 11 in India, 13 in China, five in South Korea, two in Japan and one in Thailand.
“The Indian marketplace is an important place for us,” Stephenson said. “China gets a lot of the publicity in Asia, as it should, given its size. But we also feel that India is an important place, and we're investing in that. Not as aggressively as in China, but I think appropriately.”
Core product growth
Fuel and brake is one of Cooper Standard's four core product lines, joining sealing and trim, fluid transfer/premium hose systems, and anti-vibration systems. AMI's business helps strengthen that position in China while consolidating its position as one of the leaders in the North American market.
AMI founded its fuel and brake business in 2008, while the firm's core business consists of products for automotive powertrain applications. Since then, Stephenson said the unit has grown significantly to the point where it expanded into China in 2013 and grew to two plants.
The firms have signed and closed the North American part of the deal and are waiting for the formal approval processes to occur with the Chinese government. Stephenson added the companies don't anticipate any issues and estimated it would close within 60 to 90 days.
If approved, Cooper Standard would operate 15 manufacturing sites in China. About 250 employees – 125 in Indiana and 125 in China – will transfer with the plants. Stephenson said up to 75 more could be transferred as Cooper Standard relocates the rest of AMI's fuel and brake business into other existing facilities.
“We looked at this as a business that's an easy tuck-under for the Cooper Standard organisation,” he said. “It's part of our core product line and a business that we had thought executed well. It's something we think we can integrate quickly into our organisation.”
Cooper Standard's Chinese unit produces about $500 million in sales, but Stephenson said the goal is to grow that figure to $1 billion (€890 million) before the end of the decade. The bulk of Cooper Standard's business in China is in sealing products. However, the company has made a number of investments in the last two years to grow its fuel and brake and premium hose/fluid transfer presence in the region.
“This really helps accelerate our growth in the fuel and brake business,” he said. “We've been a small player, but we're investing heavily now in facilities and capabilities. This just helps accelerate that growth by bringing us a book of business, bringing us a couple of facilities and bringing us some talented people.”
The company has made a number of other moves in China in the last two years. It established a technical centre in Shanghai in 2014, including a test centre for fluid transfer systems products; acquired majority ownership of its joint venture with China-based Huayu Automotive Systems Co. Ltd.; expanded the operational scale of fluid transfer and fuel and brake delivery product lines in Eastern China; and opened a new sealing facility in Northeast China.
More recently, it opened two facilities in early 2016 – in Chongqing and Huai'an. The Chongqing site will produce fluid transfer systems, fuel and brake delivery systems, and sealing systems.
Its Huai'an facility will focus on low pressure premium hose lines and is the first under the company's joint venture with Japan's Inoac Corp., established in 2014 with Cooper Standard holding a 51 percent stake. Products for the joint venture are expected to include low pressure, premium hose and transmission oil cooler lines for radiator, emissions, vacuum brakes, turbo chargers, heater, air conditioning and power steering applications, Cooper Standard said.
New India headquarters
In India, the firm relocated its headquarters to Pune from its previous location about 900 miles north in Sahibabad, India. The new site employs about 40 at a 6,000-sq.-ft. facility.
Stephenson said the site does not have manufacturing capabilities. The technical centre will focus on designing sealing components and fuel and brake delivery products, which are both manufactured by Cooper Standard at other sites in the country.
The headquarters will oversee all of Cooper Standard's India operations, which includes two joint ventures in the country – one focused on fluid transfer/premium hose and the other on anti-vibration systems. The firm refurbished a relatively new, existing building.
“One thing we're doing around the world is standardise the look and feel of our facilities,” Stephenson said. “You know you're in a Cooper Standard facility when you walk into this tech centre.”
The executive added that not all of the employees transferred to the new headquarters as some elected to pursue other opportunities. The company employs about 30,000 worldwide with operations in 20 countries.
“We just feel this is a more appropriate location given our geographic customer base mix in India,” Stephenson said. “Part of it was positioning our footprint in the correct part of India, and from this point forward we will be adding capability over time as well.”