Trumpf buys 72 percent of Chinese tool building company
This majority stake in Jiangsu Jinfangyuan CNC Machine will allow Trumpf to expand its Chinese presence with joint sourcing, while the JFY brand remains independent.
Ditzingen, Germany - 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 ~72 percent in the Chinese company. The companies provided no information about the price involved in the acquisition. This news was announced by the Swabian family-owned company at its annual press conference in Ditzingen.
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 ~70M Euro.
"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."
With its majority stake in JFY, Trumpf continues to expand its already good position in the Chinese market and is giving Trumpf access to the market's extremely dynamic middle segment.
Two-year acquisition process
The acquisition of the majority stake in JFY was made possible in a process that took more than two years to complete and was accompanied by support from 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.
The acquisition of JFY is one of a series of changes with 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 2.34B 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 2.33B Euro, it represents a small increase of almost 1 percent. (More: Trumpf's annual sales increase 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 Leibinger-Kammüller.
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 154M Euro (previous year's figure: 211M Euro) because there was a high level of investment in future sectors. For example, Trumpf invested a total of 211M Euro in research and development – about 9 percent more than the previous year. Leibinger-Kammüller said that this was "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. At the end of the fiscal year on June 30, 2013 Trumpf had 9,925 employees worldwide – 370 more than one year previously.
(Photo: Production floor at JFY. Courtesy: Trumpf)