March 6, 2007
NTN Creates New Joint Venture for CVJ Production in Alabama, USA
NTN corporation (NTN) will establish a joint venture company with Korea Flange Co. Ltd. (KOFCO) to manufacture and sell constant velocity joints (CVJ), an automobile drive-line part, in the state of Alabama, USA.
1. Purpose of the new company
The new joint company will become the second CVJ production base in the US for NTN, following NTN Driveshaft, Inc. in the state of Indiana. The company will supply CVJs to Hyundai Motor Manufacturing Alabama, LLC (HMMA), which has been in operation since 2005. KOFCO Group supplies CVJs to Hyundai Kia Automotive Group in Korea.
NTN, in close cooperation with the KOFCO Group, will expand its CVJ business in the US by satisfying HMMA's need for sourcing CVJs locally.
2. Schedule
The joint venture company will be established in March 2007 and start operations in February 2008.
Sales will be about 2.5 billion yen in FY2008 and double to 5.0 billion yen in FY2010 in response to the production increase expected by HMMA.
3. Outline of the new company
| (1) | Company name: | Seohan-NTN Driveshaft USA Corporation |
| (2) | Business line: | Manufacture and sales of CVJs |
| (3) | Capitalization: | US$6 million |
| (4) | Investors: | NTN49% KOFCO Group51% |
| (5) | Location: | Auburn, Alabama, USA |
| (6) | Established: | March 2007 (expected) |
| (7) | Start of Operations: | February 2008 (expected) |
| (8) | Investment: | Approx. US$7 million (by 2009) |
| (9) | Sales: | Estim. 2.5 billion yen |
| (10) | Employees: | 30 (FY 2008) 50 (FY 2010) |
CVJs to be manufactured and sold
As CVJs can smoothly transmit engine torque at a constant velocity to the wheels of an automobile, they are indispensable components for front-wheel drive and 4 - wheel drive vehicles. In recent years, there has also been growing demand for rear-wheel drive CVJs as drivers expect a more comfortable ride.
In addition, many CVJs are also used in propeller shafts and steering shafts.
4. Outline of KOFCO Group
| Business lines: | Manufacture and sales of CVJs, automotive parts including front-axle and flange |
| Location: | Ulsan-city and Jincheon-gn,Chungcheongbuk-do, Korea |
| Established: | July 1974 |
| Capitalization: | Approx. 4 billion yen |
| Sales: | Approx. 70 billion yen |
| Major customers: | Hyundai Kia Automotive Group |
| Employees: | Approx. 900 |
NTN, in September 2003, established a joint venture company (BEIJING NTN-SEOHAN DRIVESHAFT CO. , LTD.) in Beijing , China to manufacture and sell CVJs with the KOFCO Group, to whom NTN had licensed CVJ technology. BEIJING NTN-SEOHAN DRIVESHAFT CO. , LTD. supplies CVJs to Hyundai Kia Automotive Group in China.
5. Location of the new company and the NTN's existing manufacturing sites
