HANOVER, Germany—ContiTech A.G. said it intends to build on its momentum of recent months by bolstering its position in various geographic and product markets through organic growth and acquisition.
The company, owned by Continental Corp., said on April 8 April that it posted a 2 percent increase in earnings to $638.76 million on 2013 sales of 5.39 billion (up from 5.11 billion), around 5 percent higher than the previous year.
“Our strategy is built on sustainable and profitable growth,” said Heinz-Gerhard Wente, head of the Continental ContiTech division and chairman of ContiTech AG, at a news conference at Hanover Messe 2014. “We want to be the best company for our customers—in all our quite different applications—not necessarily the biggest.
“Our decisions in the past year were rigorously in line with this strategic direction.”
The purchase of rubber and plastic specialist Veyance Technologies Inc. will expand Contitech's industrial business significantly and change its geographic profile.
At 65 percent, most of ContiTech's sales are generated in Europe, with the North and South America accounting for 18 percent. When Veyance has been included fully in consolidation, proportions for sales will shift to around 46 percent in Europe and 32 percent in the Americas.
“The planned acquisition of Veyance Technologies Inc. will allow us to improve our market presence in regions in which we are still are under-represented at this time, particularly in North and South America,” Wente said.
In the past year, the company's has stepped up its presence in Asia in particular. In China, ContiTech acquired Taizhou Fuju Rubber Belt Manufacture Co. Ltd., a local drive-belt-producing company, and inaugurated a new production line for automotive interior foils in Zhangjiagang.
In South Korea, it built a new hall for air spring production. ContiTech also has expanded its activities in Europe with acquisitions and the construction of new production facilities.
This year, in addition to the planned acquisition of Veyance, ContiTech has bought Inotec Innovative Technology GmbH and Präzisionstechnik Geithain GmbH, two blow molding companies, and is developing the site in Vac, Hungary, into a center for plastics. It is also building a factory in Brazil for oil production and gas extraction hoses.
The company said in 2013 it invested $229.46 million in software, property, plants and equipment worldwide, better than $20 million more than the previous year.
“We are optimistic overall about fiscal 2014. We have already had three promising months,” Wente said. “ContiTech is again aiming to boost sales another 5 percent this year. We also want to match the previous year's income return, even if exchange rates negatively impact our results.”
ContiTech employed 29,725 at the end of 2013, 1,500 more than the previous year.