TRUMPF acquires Chinese mechanical engineering company
Ditzingen, October 16, 2013 – TRUMPF and the Chinese machine tool producer Jiangsu Jinfangyuan CNC Machine Company Ltd. (JFY) will soon be cooperating closely: TRUMPF has acquired a majority stake of approximately 72 percent in the Chinese company. This was announced by the Swabian family-owned company at its Annual Press Conference in Ditzingen.
'Acquisition of this prestigious Chinese company is strengthening our presence in the world's most important mechanical engineering market,' said TRUMPF President Nicola Leibinger-Kammüller. 'It is very unusual that a direct investment like this has been made possible for us, as a medium-sized company – and especially in mechanical engineering, which the Chinese government has classified as a key sector.'
JFY manufactures machine tools for sheet metal processing and, in terms of output quantities, ranks as the Chinese market leader for punching and bending machines. The company is also growing increasingly important in the laser cutting machine sector. JFY was privatized in 1997 and is based in Yangzhou (300 km west of Shanghai). In 2012, with almost 700 employees, JFY generated sales of approximately 70 million Euro.
With its majority stake in JFY, TRUMPF continues to expand its already good position in the Chinese market. Importantly, this acquisition is giving TRUMPF access to the market's extremely dynamic middle segment. Leibinger-Kammüller: 'We want to be able to consistently accompany customers as they grow, and as their technological requirements increase. With our alliance, TRUMPF and JFY are now more in a more powerful position than other providers to give customers products on every technological level, and from the same group of companies.'
Two-Year Acquisition Process
The acquisition of the majority stake in JFY was made possible in a process that took over two years to complete, and was positively accompanied by Chinese as well as German authorities and associations. In China, JFY is a powerful and well-established brand – and the brand will continue to remain independent. The cooperation with TRUMPF will strengthen JFY technologically, and it will also benefit from the German company's global position. TRUMPF and JFY will expand their joint sourcing in China, thereby securing cost benefits. The company's operational management will remain in the hands of the team that has managed it for many years, which will also retain the shares in JFY that were not acquired by TRUMPF. TRUMPF and JFY provided no information about the price involved in the acquisition.
TRUMPF and JFY not only complement each other in terms of their product portfolios, they also share the same priorities where corporate culture is concerned. It is the mission of both companies to be technological leaders in their respective market segments. Both also place the highest importance on thinking long-term, on continuous improvement, and on responsible treatment of employees.
The acquisition of JFY is one of a series of changes by means of which TRUMPF intends to realize growth opportunities in promising markets over the coming years. TRUMPF continued to grow over the past fiscal year of 2012/13: the Ditzingen-based company increased its sales to 2.34 billion Euro. This is the highest sales figure in the 90-year history of the company. In relation to the previous year's sales figure of 2.33 billion Euro it represents a small increase of almost 1 percent. 'The sales increase in relation to the previous year is admittedly small, but in view of the extremely difficult market conditions we had to face, we can certainly be happy with this result,' said TRUMPF President Nicola Leibinger-Kammüller at the Annual Press Conference.
Expansion of Research and Development
While orders received in fiscal year 2012/13 remained at the previous year's level, the pre-tax result fell to 154 million Euro (previous year's figure: 211 million Euro). The reason for this was a high level of investment in future sectors. For example, TRUMPF invested a total of 211 million Euro in research and development – about 9 percent more than the previous year. Leibinger-Kammüller: 'This is the highest amount we have ever spent on research and development in one single year.' TRUMPF has thus increased its R&D quota to 9 percent, and hired new staff as well. At the end of the fiscal year on June 30, 2013 there were 1,430 employees working in research and development at TRUMPF – 6 percent more than one year previously. In the growth market of Asia, the number of employees also increased – by 11 percent. Leibinger-Kammüller: 'All this costs money in the short term, but in the long term these investments will pay off – and thinking long-term has always been one of the major strengths of family-owned companies.'
At the end of the fiscal year on June 30, 2013 TRUMPF had 9,925 employees worldwide – 370 more than one year previously.