ContiTech optimistic about 2014 prospects
ERJ staff report (PR)
Hanover, Germany – ContiTech aims to build on its momentum of recent months by advancing its position in various geographic and product markets through organic growth and acquisition.
The Continental Corp-owned company, on 8 April, posted a 2 percent increase in earnings (EBIT) to €462.1 million on 2013 sales of €3.9bn, around 5 percent higher than the previous year.
“Our strategy is built on sustainable and profitable growth,” said Heinz-Gerhard Wente, head of the Continental ContiTech division and chairman of ContiTech AG, at a press conference at Hannover Messe 2014. “Our decisions in the past year were rigorously in line with this strategic direction.”
The agreed purchase of Veyance Technologies Inc. will significantly expand Contitech’s industrial business and change its geographic profile.
At 65%, most of ContiTech’s sales are generated in Europe, with the Americas (North and South America) accounting for 18%. When Veyance has been fully included in consolidation, proportions for sales will shift to around 46% in Europe and 32% in the Americas.
“The planned acquisition of Veyance Technologies Inc. will allow us to improve our market presence in regions in which we are still underrepresented at this time, particularly in North and South America,” said Wente.
In the past year, the company’s has stepped up its presence in Asia in particular. In China, ContiTech acquired Taizhou Fuju Rubber Belt Manufacture, a local drive-belt-producing company, and inaugurated a new production line for automotive interior foils in Zhangjiagang.
In South Korea, it built a new hall for air spring production. ContiTech has also expanded its activities in Europe with acquisitions and the construction of new production facilities.
This year, in addition to the planned acquisition of Veyance, ContiTech has bought Inotec, a blow moulding company, and is developing the site in Vác, Hungary, into a competence centre for plastics. It is also building a factory in Brazil for oil-production and gas-extraction hoses.
“We are optimistic overall about fiscal 2014. We have already had three promising months,” concluded Wente. “ContiTech is again aiming to boost sales another 5% this year. We also want to match the previous year’s income return, even if exchange rates negatively impact our results.”
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