CHINA: Tenneco expands manufacturing and engineering operations
Tenneco has announced that it will open a wholly-owned elastomer manufacturing facility in Suzhou, China and a joint venture emission control engineering centre in Shanghai. The company has also reached an agreement to increase its ownership share to 65% in its Beijing ride control joint venture.
"These expansions represent a significant portion of the estimated US$21m investment we intend to make in China over the next three years," said Mark P. Frissora, chairman, CEO and president, Tenneco. "One of Tenneco's key growth strategies is to expand in emerging markets and China is our greatest opportunity in this area."
Tenneco Suzhou Vibration Control Company Ltd. is Tenneco's first solely-owned operation in China. This new 5,800 sq meter manufacturing plant will leverage Tenneco's global elastomer engineering and manufacturing capabilities to supply elastomer components under the Clevite Elastomer and Monroe brand names. The plant, which will initially employ 80 people, is scheduled to open in June.
A new joint venture engineering centre will develop automotive exhaust products for Tenneco's growing domestic and foreign customer base in China.
The centre is located adjacent to the company's Shanghai joint venture emission control manufacturing facility and is due to open at the end of 2006. The new centre will provide engineering resources to support both OE and aftermarket customers. The engineering centre is part of the company's joint venture with Shanghai Tractor and Engine Company (STEC), which is a subsidiary of Shanghai Automotive Industry Corp. (SAIC).
"Our new engineering centre is key to our success in China. It enables us to locally support our customers with technical expertise, engineering and testing while saving time and costs, and strengthening communications," said Frissora. "Additionally, we'll be able to localise global programmes more efficiently and evolve to meet our customers' needs for a greater range of products and technologies."
Finally, the company announced that it is raising its majority stake in the Beijing Monroe Shock Co. from the current 51% to 65%, subject to government approval. Tenneco first entered the China market through its joint venture in Beijing with the Beijing Automotive Industry Corp. (BAIC). Today, the joint venture supplies ride control components to leading OE manufacturers at its newly opened 34,000 sqm plant.
Tenneco established its first joint venture in China in 1995 and, according to company estimates, is China's number one supplier of exhaust systems to original equipment manufacturers. In addition to the just announced facility in Suzhou, Tenneco operates five majority-owned joint ventures in China that produce mufflers, catalytic converters, shock absorbers and ride control modules. Volkswagen (SVW), General Motors (SGM), Chery, PSA (DPCA), Daimler Chrysler (Beijing Jeep), Suzuki, Nissan, Audi (FAW-VW) and Ford are among the company's OE customers.