HANOVER, Germany-ContiTech Holding GmbH has secured its long-sought-after British production base, agreeing in late March to buy TBA Belting Ltd.'s power transmission belting business in Wigan, United Kingdom.
TBA, a subsidiary of the diversified engineering concern T&N P.L.C., retains its conveyor belting and industrial rubber goods activities at Wigan.
Separately, ContiTech Managing Director Peter Haverbeck said the firm is looking for potential manufacturing partners in eastern Europe and the Far East as part of an overall global expansion strategy.
The Continental A.G. business division created ContiTech Power Transmission Systems Ltd. to effect the takeover, which still is subject to the approval of the German monopolies authorities. The purchase price was not disclosed; TBA parent T&N said the proceeds were ``not material to assets.''
TBA's power transmission belting business employs 220 and has sales of about $41 million annually, 45 percent of that from automotive customers. The retained conveyor belting and industrial rubber goods activities at Wigan employ 180, T&N said.
Both the divested and retained businesses share manufacturing space in Wigan, and it is anticipated they will continue to do so, TBA said.
T&N decided to divest the transmission belting business because it was not central to the company's core engineering activities, although it was ContiTech which first approached T&N about the TBA business.
ContiTech's existing activities in this business area consist of factories in Hanover and Dannenberg, Germany, employing 1,000; the power transmission business is part of ContiTech's industrial products business group, with annual sales of about $390 million.
Conti considers the acquisition strictly will be complementary to its existing belting unit, and should help it build its original equipment business with certain manufacturers. ContiTech has sought a U.K. production base for several years, but to date had not found the right partner.
The transaction fits in with other moves ContiTech has made recently, most notably the manufacturing off-take and marketing agreement with Cooper Tire & Rubber Co.
Separately, ContiTech announced fiscal 1994 pre-tax earnings rose 21 percent from 1993 to $70.4 million, thanks largely to cost-containment measures, increased sales volume and better product mix.
Sales rose 17 percent to $1.53 billion, although a good portion of the increase is attributable to the full-year consolidation of the J.H. Bennecke business acquired in late 1993. Sales in 1995 are expected to rise another 16 percent, based on the consolidation of recent acquisitions and a buoyant first quarter.
Earnings, however, are being squeezed by the spiraling costs for raw materials, the falling value of the U.S. dollar, and increases in wages and benefits agreed to recently.