One of Europe's largest automotive suppliers will buy a German competitor to boost production of plastic exterior parts.
Dynamit Nobel AG, of Weissenburg, Germany, agreed in mid-June to purchase the plastic vehicle components unit of Phoenix AG, a smaller rival in Hamburg, Germany. The sale price was not disclosed.
The purchase spurred talk that Nobel's plastics division would expand outside Europe. The company may build its first manufacturing facility in North America, where German carmakers Mercedes-Benz AG and BMW AG now have plants, said Lothar Schneider, Nobel sales and marketing manager.
The company also plans to increase production capacity at the Phoenix plants and add employees, Schneider said. Current production levels at those plants were not disclosed.
An overseas shift would not surprise equity analyst Brian Wilkinson of HSBC James Capel Ltd., an investment firm in London. Wilkinson, who follows Phoenix, said the company's plants give Nobel more of a wedge in the luxury car market, an area where Phoenix has more presence with German carmakers than does Nobel.
VW, MERCEDES ARE CUSTOMERS
Among Nobel's customers are Volkswagen AG and Mercedes-Benz, both of whom use instrument panel systems produced by Nobel.
Included in the acquisition, which was expected to become final last week, are plastic exterior trim plants in Reinsdorf and Sterbfritz, Germany. The facilities are operated by Phoenix Kunststoff GmbH, the plastics vehicle components unit of Phoenix.
As part of the sale, the entire unit was sold to Nobel. The large supplier's operations currently involve its Dynamit Nobel Kunststoff GmbH division, a maker of thermoplastic interior and exterior parts, and Menzolit-Fibron GmbH, a producer of sheet and bulk molding compound for body panels and other components.
The Phoenix plants injection mold a variety of painted components, such as bumper fascias, exterior trim and spoilers.
The sale puts to rest an announcement by Phoenix in June that it would sell shares of its plastics car parts division. The company, which had seen sales for its Kunststoff division slip in recent years, wants to focus resources on its other core businesses, said Phoenix CEO Konrad Ellegist.
Those businesses include its higher-volume Stankiewicz GmbH automotive acoustic insulation business unit. The unit makes interior sound-deadening parts.
In contrast, the company's exterior plastics operations only account for about 10 percent of company sales, Ellegist said.
Phoenix's expansion plans have begun in earnest. The company is building a plant, expected to cost $6.7 million, near Antwerp, Belgium, to supply acoustical parts for General Motors' Opel unit. The company also is expanding through joint ventures into India and the Czech Republic, Ellegist said.
In addition, the company is making acoustical automotive parts at a small manufacturing center near BMW AG's plant near Spartanburg, S.C.
Meanwhile, acquiring the Phoenix plants adds more bulk to the exterior and interior systems giant.
Dynamit Nobel is owned by Metallgesellschaft AG of Frankfurt, Germany, a holding company. The company's Kunststoff and Menzolit-Fibron divisions racked up combined sales of 918 million marks ($531 million) in fiscal 1996, about a quarter of the company's total revenues, said Schneider.