Continuity in internationalization: BOGE Rubber & Plastics on track for further growth

 

Damme. The automotive supplier BOGE Rubber & Plastics achieved once again record sales in fiscal year 2016 which grew by 3.2 percent to EUR 763.4 million. A major growth driver was the large-scale plastic pedal modules project at the Damme location. In the opinion of Dr. Torsten Bremer, CEO of BOGE Rubber & Plastics, there are essentially three reasons why the automotive supplier keeps on growing: "Innovative products, further internationalization and dedicated employees are key factors for the positive development of the Group. These factors will continue to be the basis for us as a supplier to actively help shape the future of the automotive industry, "emphasized Dr. Bremer during the annual press conference on Friday (April 28) at the Group headquarters in Damme, Lower Saxony.
 

Technological expertise

BOGE Rubber & Plastics invested more than EUR 44.6 million in fiscal 2016 to account for more than five percent of total sales in order to strengthen its position as a technology and innovation leader. "We appreciate the reliability of our owner and the commitment to invest," said Dr. Bremer. Germany ranks top with an investment volume of EUR 22.2 million, followed by Slovakia (EUR 10.3 million) and China (EUR 6.2 million). Among the major investment projects in 2016 were the pedal modules project at the Damme location, the engine mount system MLBevo for Audi (Modular longitudinal platform of the second- generation) at the Simmern location (Hunsrück), the clutch pedal module project for Ford, the top mounts for BMW and the stabilizer links and transmission mounts for VW (MQB platform, A0) at the Trnava location (Slovakia) as well as the engine mounts for Alfa Romeo Giorgio (Simmern / Germany) and the hydraulic subframe mounts for Audi (Modular longitudinal platform / MLBevo) at the Damme location.

Investing consistently in research and development is a key part of BOGE Rubber & Plastics' strategy: EUR 35.2 million were allocated to this area in the 2016 financial year. This corresponds roughly to the previous year‘s figures. In total, this represents 4.6 percent of sales. The automotive supplier employs more than 300 people in R&D which is increasingly globally oriented and organized. "We have a high level of competence at our development locations all over the world to be able to provide best-possible support to our customers on the spot," emphasized Dr. Bremer. Main development locations are Damme and Bonn (both Germany). Regional development centers are located in Hebron (USA), Trnava (Slovakia), Qingpu (China), Fontenay (France) and Dingley (Australia). In Novi (USA), Yokohoma (Japan) and Turin (Italy) technical sales offices are located.

BOGE Rubber & Plastics’ objective is to continue to develop innovative solutions for the realignment of the automotive industry in close cooperation with its customers and suppliers and to make these innovative design solutions commercially viable. A special focus is currently on lightweight design. In addition, the increasing requirements on driving comfort, from vibration control to noise optimization, play a key role.
 

Internationalization 2016: Second factory in China and office in Japan

BOGE Rubber & Plastics Zhuzhou Co. Ltd. is the second production facility BOGE Rubber & Plastics recently has established in China, the world's largest automotive market. The Automotive Division of Zhuzhou Times New Material Technology Co., Ltd. (TMT) has been integrated into the BOGE Rubber & Plastics Group. TMT is the parent company of BOGE Rubber & Plastics. Since the opening of the plant in QingPu near Shanghai in 2008, the BOGE Rubber & Plastics Group is now represented in China through a second location. The main focus of the BOGE plant in Zhuzhou is on vibration technology and noise insulation for the automotive industry. Currently, the production program of BOGE Rubber & Plastics Zhuzhou Co. Ltd. focuses on the production of rubber-metal components for trucks and buses. With this new plant, BOGE Rubber & Plastics will have direct access to local Chinese car manufacturers.
A further important step to continue expanding the global presence was the opening of the office in Yokohama (Japan). BOGE Rubber & Plastics is now also present in the world's fourth largest automotive market. In Japan, a large number of internationally successful car manufacturers have their headquarters.

The analysis of sales by region shows that Germany is still the largest market for the world's leading supplier of vibration technology and plastics solutions in the automotive industry. About 40 percent of the Group sales are generated (EUR 307.7 million) in this area, followed by North America with a share of 21 percent (EUR 159.0 million) and Asia / Pacific with 16 percent (EUR 118.5 million).
 

Employees

In the financial year 2016, the BOGE Rubber & Plastics Group employed an average of 3,758 people (previous year: 3,765 people). Most of the employees are based in Germany (about 1,800) followed by China (about 800), Slovakia (about 700) and the USA with about 250 people.
 

Outlook

In the coming years, BOGE Rubber & Plastics Group will continue its internationalization strategy. "In order to achieve our goal, we must become even more international. It is about being present in the important markets of the world. We have been well represented in the US and Europe for decades, but the main growth potential has been in Asia for several years. We are still underrepresented in China and other Asian countries such as South Korea. The aim, then, is rather not only to produce locally for local customers but also to fully support development projects, "Dr. Bremer explains the strategy.

A further step in implementing this strategy is to continue to increase the market presence in China in order to be able to meet successfully the requirements of a strong automotive market growth in China. Construction of the third plant in China is scheduled to be in May this year. The production startup in Wuxi is scheduled for 2018. The additional production Annual Press Conference 2017 Page 4/6, 28.04.2017 capacities are expected to generate an annual turnover of around EUR 100 million. This would increase BOGE Rubber & Plastics' total sales in China to over EUR 250 million per year.

Another essential component of BOGE Rubber & Plastics’ growth strategy is Mexico, currently the seventh-largest production location in the automotive industry worldwide. The production start in San Luis Potosí is scheduled for this quarter. "As a globally active automotive supplier, thus we are supporting our top customers, who are for the most part already represented in Mexico with their own production facilities or are establishing new capacities," says Dr. Bremer. In the Mexican plant, projects for all product lines, i.e. vibration technology for chassis and powertrain applications as well as plastic components and modules are to be implemented.

In 2017, the automotive supplier again aims to remain on a growth path. Based on a predicted global economic growth rate of 3.4 percent and an increase in global automotive production (passenger cars and commercial vehicles) from one percent to 96.7 million units, BOGE Rubber & Plastics expects a sales growth of at least five percent for 2017.

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