ContiTech to expand operations in Slovakia, S. Korea

HANOVER, Germany—ContiTech A.G. is bolstering its presence in South Korea and Slovakia to build its operations further in Eastern Europe and Asia.

The company's Vibration Control business—which has been expanding in Slovakia over the last few months, investing about $10.4 million in its Dolne Vestenice, Slovakia, complex in the process—is commissioning construction of another plant on the site, this one featuring 43,000 square feet of manufacturing space. Facilities within the complex currently have 215,280 square feet devoted to manufacturing.

ContiTech Vibration Control also is planning to expand its research and development center in Dolne Vestenice and add more jobs.

In an unrelated move, the firm's joint venture, ContiTech DaeWon Air Springs Ltd., has spent about $5.13 million to build a modern 54,000-sq.-ft. plant in Cheonan, South Korea.

ContiTech wants to expand its commitment in Slovakia, a spokesman said, which is why it has invested so heavily in the Dolne Vestenice complex.

“This new facility will strengthen our site in Slovakia, taking us one step closer toward our Eastern European customers,” said Kai Uwe Fruhauf, head of the ContiTech Vibration Control business. “We want to tap into additional business with automotive manufacturers in the Eastern European market.”

The company is increasing capacity at the complex because its goal is to increase sales by about 30 percent at the new and existing plants, which are attached and have a work force of approximately 540, between 2014 and 2016.

Its Vibration Control division has had a presence in Slovakia since 1996 when it began operating the Dolne Vestenice facility, a producer of vibration control components for the automotive industry along with sealing technology for brakes and steering systems for its customers around the globe.

ContiTech recently sold its plant in neighboring Pertizanske and combined that production with its facility in Dolne Vestenice, the spokesman said. ContiTech merged the production operations, he said, because it was easier to handle at one factory.

Its research and development center, launched in 2013 on the Dolne Vestenice site, will undergo an expansion later this year, he said. Additional soon-to-be-created jobs at the facility will boost its R&D work force to 25 engineers.

The center was created as part of the company's plan to develop in regional markets.

“It invigorates our development expertise at the site and therefore our market position in Eastern Europe,” said Karl Armbrecht, technical director at the facility.

It features the same machines as the firm's hubs in Changshu, China, and Detroit, the company said, ensuring customers get the same results from all its R&D facilities worldwide. However, the firm added, measurements with greater test loads also are possible in Dolne Vestenice.

Meanwhile on the Asian front, the new factory in South Korea replaces a facility the firm leased in the city, according to the spokesman. The site's annual capacity was projected at about 180,000 air springs.

Currently, ContiTech DaeWon employs 22 at the facility, but the company plans to add a more personnel.

Its old plant had the same square footage and capacity as the new one, the spokesman said, but the second site was built with the possibility of expanding capacity.

Products produced in Cheonan are distributed throughout the South Korean and other Asian markets, he said.

The company said it selected the site, located in an industrial complex, because it offered customers easy access to the plant and provided the road links needed for efficient transportation of the firm's products.

Launch of the new factory, which took less than six months to construct, ties in with the joint venture's 10th anniversary. ContiTech and South Korean automotive parts manufacturer DaeWon Kang Up Co. Ltd. formed the company in 2003. ContiTech is the majority owner of the JV, according to the spokesman.

The addition of the company's own plant in Cheonan “clearly says something about the future of our joint venture,” according to Hannes Fried-erichsen, who heads ContiTech Air Springs Systems.

“We have been working together successfully for 10 years and have achieved a strong position on the Korean market.”

He said with the company's own factory in the city, ContiTech DaeWon intends to expand the relationships it has and tap into new ones to expand the business.

Air springs produced at the plant are used on commercial and rail vehicles, but they also are earmarked for other sectors. Key customers in the automotive segment include Hyundai, Kia and Daewoo Bus, the company said.

“We see good opportunities for growth in the (South) Korean market, particularly in the truck and trailer and in industrial businesses,” said Andreas Kattre, managing director of ContiTech DaeWon.

The new factory “forms the basis for high productivity and top quality and creates a closer relationship with customers,” he said.