HANOVER, Germany—Benecke-Kaliko Group is expanding its operation in Asia to handle growing demand for surface materials used for automotive interiors in China.
It plans to build a second plant in China, a spokesman said, adding that the foundation stone for the facility will be laid before the end of fall.
Cost for the first phase of the project was estimated at about $50.7 million, he said, noting that it's the largest investment in company history. The company, a subsidiary of ContiTech A.G., said the new factory will span about 260,000 square feet.
Materials made at the site, located in Changzhou, are destined for the Chinese automotive market. The materials are environmentally compatible, low in emissions and non-allergenic, the company said. With the materials, it said, auto makers in the country can meet the wishes or car buyers and the Chinese government's aim of increasing the air quality in automotive interiors.
The plant is needed because of continued high demand for Benecke-Kaliko's products, according to Dirk Leiss, chairman of the executive board.
Once demand warrants it, another expansion phase aimed at doubling capacity will be launched at the firm's newest factory.
“Our second plant will make a substantial contribution to our continued success in penetrating global markets,” he said. There is strong demand from auto makers in China for the company's products, he said, in particular for high quality and environmentally compatible materials for automotive materials.
The firm's newest plant demonstrates the importance of the Chinese market and “the good relations between Benecke-Kaliko and our partners in trade and industry,” Leiss said.
Benecke-Kaliko intends to build the plant and operate it entirely on the principles of sustainability, Project Manager Gebhard Parigger said.
The company's other production facility in China is a joint venture between Benecke-Kaliko and Jiangsu Changshun International Trading, called Benecke-Changshun Auto Trim.
The companies spent almost $9 million to expand capacity at the site, located in Zhangjiagang, in October 2013.