Second Joint Production Company Established in China for CVJs
NTN Corporation has decided to establish a joint venture for the production and sales of constant-velocity joints (CVJs) in Beijing, China with the Korea Flange Co., Ltd. (KOFCO) and the Yulon Group of Taiwan.
1. Aims of the joint venture
Following on Guangzhou NTN Yulon Drivetrain Ltd., established in the summer of last year, NTN has decided to establish a joint venture as a base for the production of CVJs in cooperation with KOFCO (which supplies CVJs to Hyundai Motor Company and Kia Motor Corporation in South Korea) and with the Yulon Group, which has a wealth of operational experience in China. This joint venture will utilize NTN's technological prowess and the strengths of the two partner companies in order to raise competitiveness in quality, cost, delivery, service, and other areas and supply CVJs to Hyundai and Kia Motors, which are already producing automobiles in China.
For NTN, this joint venture will increase its CVJ operations in China and meet the local procurement needs of China's rapidly developing automobile manufacturers.
2. Future Plans
The joint venture was established in September 2003 and plans are to start production of CVJs in February 2004. Sales of approximately ¥1.1 billion are forecast for the first fiscal year 2004. With increased production by Hyundai and Kia Motors, sales are forecast to double in two years and reach ¥3-4 billion in four years.
3. New Company Details
| (1) | Company name: | Beijing NTN-Seohan Driveshaft Co., Ltd. |
| (2) | Business: | Production and sales of CVJs |
| (3) | Capitalization: | US$5 million (approx. ¥600 million) |
| (4) | Capital Contribution: | NTN 40%, KOFCO 51%, Yulon Group 9% |
| (5) | Location: | Beijing Opto-Mechatronics Industrial Park (Tongzhou District, Beijing, Republic of China) |
| (6) | Established: | September 2003 |
| (7) | Start of operation: | February 2004 (planned) |
| (8) | Site size: | Approx. 23,000 square meters |
| (9) | Floor area: | Approx. 4,500 square meters |
| (10) | Investment: | Initially US$2 million (approx. ¥200 million) |
| (11) | Planned sales: | Approx. ¥1.1 billion for the first fiscal year |
| (12) | Employees: | Initially approx. 20; approx. 50 planned in 2010 |
4. Partners in Joint Venture
1) KOFCO
| (1) | Business: | Production and sales of CVJs, front axle assemblies, flanges, and other automotive parts. |
| (2) | Capitalization: | 13.5 billion won (approximately ¥1.4 billion) |
| (3) | Location: | 194 Dongbu-Dong, Dong-Gu, Ulsan, Korea |
| (4) | Annual turnover: | 430 billion won (approx. ¥43 billion) |
| (5) | Employees: | 590 |
2) Yulon Group
| (1) | Annual turnover: | NT$190 billion (approx. ¥700 billion) |
| (2) | Headquarters: | Taipei, Taiwan |
| (3) | History: | 1951 Textile Company founded
1953 Yulon Motor Co., Ltd. founded
1969 China Motor Corporation founded |
| (4) | Group businesses: |
Automobiles, textiles, finance and investment, technology businesses, real estate. |
| (5) | Automobile business details: |
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- In Taiwan, the group operates China Motor and Yulon Motor. As automotive part operations, the group has ROC-Spicer Ltd., Kian Shen Corporation, and other companies. The Yulon Group is also a shareholder in the Taiway Ltd., which is an affiliate of NTN that produces and sells CVJs in Taiwan.
- As automobile operations in China, the group owns South East Motor Corporation and Aeolus Automobile Co. As automotive part operations, the group has Fujian Spicer Drivetrain System Co., Shenyang Spicer Drivehsaft Co., and other subsidiaries and affiliated companies. The Yulon Group is expanding its operations in the Chinese market.
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