Current Issue

ContiTech eyes growth as Veyance acquisition nears

Comments Email
Heinz-Gerhard Wente, ContiTech CEO.
Heinz-Gerhard Wente, ContiTech CEO.

HANOVER, Germany—ContiTech A.G.'s market presence likely will change dramatically in 2014.

It aims to build on its momentum of the last several months to advance its position in various geographic and product markets through organic growth and acquisitions, Heinz-Gerhard Wente, who heads up ContiTech, said at Hanover Messe 2014, held April 7-11 in Hanover.

He said the Continental A.G. division's strategy is built on sustainable and profitable growth.

“But we want to be the best company for our customers—in all our quite different applications—not necessarily the biggest,” he said.

Its decisions made over the last several years “were rigorously in line with this strategic direction,” according to the executive.

That is especially true with the Hanover-headquartered firm's planned purchase of Fairlawn, Ohio-based Veyance Technologies Inc., which, along with the mid-2013 acquisition of Legg Co. Ltd. of Halstead, Kan., will create major inroads within the North American market and change the company's geographic profile.

Its industrial business, in particular, will get a significant boost with the purchase of Veyance.

The company's growth has had a positive impact on its global work force. The company employed about 29,725 at the end of 2013, 1,500 more than it did at the end of 2012.

ContiTech posted 2013 earnings before interest, taxes, depreciation and amortization of about $630.5 million, a 2 percent increase from last year, on sales of $5.4 billion, which were 5 percent higher than its 2012 figures.

About 65 percent of its revenues were generated in Europe, where ContiTech has a stronghold, while North and South America accounted for about 18 percent.

ContiTech's market presence in regions where it is under-represented will change as it grows, Wente said. ContiTech's sales profile likely will become a mix of 46 percent in Europe and 32 percent in the Americas.

It also expects to grow in Asia, and in particular China, where it has stepped up its presence with the purchase of Taizhou Fuju Belt Manufacture Co Ltd. and the addition of a new production line at its factory in Zhangjiagang. In addition, the company opened a new research and development center for vibration control products in Changshu.

ContiTech is growing in Cheonan, South Korea, with the addition of a new plant for air springs production, while in Europe it has begun construction of a factory in Dolne Vestenice, Slovakia, and is expanding another plant and its R&D center in the city.

It also added a hose factory in Turkey and purchased belt maker Metso Corp. in Helsinki, Finland.

Meanwhile, in Brazil the firm is building a factory for the production of hose.

“We are optimistic overall about fiscal 2014,” Wente said. “We have already had three promising months.”

He said the firm is hoping to match 2013's income return, “even if exchange rates negatively impact our results.”