GREENVILLE, S.C. - German engine parts maker Kolbenschmidt-Pierburg is looking to buy other suppliers in an effort to double its sales by 2004.
The automotive unit of Germany's Rheinmetall group intends to reach $2.85 billion in revenue by 2004, double its 1999 revenue, Chairman Dieter Seipler said.
'We cannot achieve this goal through internal growth only,' he said. 'We will look for strategic alliances and acquisitions to strengthen both our global presence and our competence around the engine.'
Seipler spoke during a visit to plants in Greenville, S.C., and Marinette, Wis.
Kolbenschmidt-Pierburg makes pistons, throttle valves and water, air, oil and fuel pumps. But the company is integrating sub-supplier parts to assemble complete piston modules, upgrading itself from a Tier 1 component supplier to a Tier 1 module supplier.
In North America, Kolbenschmidt-Pierburg's piston business is called Karl Schmidt Unisia. Japan's Unisia Jecs, owned by Nissan Motor Co. Ltd., owns 20 percent of the U.S. operation.
Between two U.S. plants and a Canadian factory, piston capacity is 30 million annually.
Half of that capacity is at the Marinette plant, which also has the most diversified piston production.
Kolbenschmidt-Pierburg has concentrated non-piston operations in Greenville. The other piston plants are in Fort Wayne, Ind., and Leamington, Ontario.
Seipler identified the U.S. market as a primary target for Kolbenschmidt-Pierburg's internal growth because U.S. automakers are increasingly concerned about fuel economy.
'We have the technology necessary to make engines comply with the strictest emission standards, and we supply it already to many European car manufacturers,' he said. 'Now the demand for parts like the electronic throttle-valve activator or a secondary air pump (is increasing).'
Seipler expects U.S. revenue to grow to about $474 million in 2003 from about $289 million in 2000 as Ford Motor Co. and General Motors cut back on in-house production.
'There is a trend to not only outsource the piston production but also to integrate the parts in a complete module, and we benefit from that trend,' he said.
The supplier will restructure its U.S. organization by creating a holding company, called Kolbenschmidt-Pierburg Inc., to coordinate business activities. It will be based in a new headquarters building opening this year in Auburn Hills, Mich.