NOVI, Mich.—Cooper Standard Holdings Inc., parent company of Cooper Standard Automotive Inc., is forming a joint venture with INOAC Corp. of Japan to expand the reach of its fluid transfer systems products in the Asia-Pacific automotive market.
Cooper Standard will own 51 percent of Cooper Standard INOAC Pte. Ltd., and INOAC will own 49 percent of the JV, Cooper Standard said. The deal is expected to close in third quarter of 2014 with staffing and asset acquisition scheduled to begin in September.
Cooper Standard also reported its second quarter 2014 results, with increased sales by 9.3 percent to $857.6 million compared to 2013. Net income decreased from $27.4 million to $13.2 million, but that included a loss of $30.3 million from a debt repurchase the firm completed in April, said Chief Financial Officer Allen Campbell.
For the half-year, sales increased to about $1.7 billion from about $1.53 billion in 2013. Net income decreased from $48.1 million to $32.9 million.
Cooper Standard said during the conference call it has completed the sale of its emissions product line to Halla Visteon Climate Control Corp., which was divested so the firm could focus on its four core rubber product lines—sealing and trim; fluid transfer systems; fuel and brake delivery; and anti-vibration systems.
The joint venture with INOAC is intended to accelerate the firm's fluid transfer systems product introduction into Asia and further strengthen its presence in the Asia-Pacific automotive market, which Cooper Standard said it has identified as a key market.
The first phase of the joint venture will be based in China, Cooper Standard said, and production is expected to begin in third quarter of 2015. Expansion into additional countries is expected to follow.
“After a careful evaluation, our leadership team has determined that forming a majority-owned joint venture with an established Asian auto parts supplier represents the best opportunity to successfully enter the market,” said Jeffrey Edwards, chairman and CEO of Cooper Standard, in a statement.
Edwards praised INOAC for its extensive footprint throughout Asia, decades of experience with rubber and plastics products, and close relationships with the Japanese original equipment manufacturers.
Cooper Standard has been active in the Asia-Pacific region. It just celebrated the grand opening of its new Asia-Pacific Technical Center in Shanghai.
“Combining INOAC's experience with Japanese customers and their Asia manufacturing footprint with Cooper Standard's global expertise in the fluid transfer systems business as well as our broad customer base really creates an unmatched potential to gain share of the $2.5 billion fluid transfer automotive market,” Edwards said.
INOAC and Cooper Standard combine to operate more than 50 plants throughout the Asia-Pacific region. Key products for the new joint venture are expected to include low pressure, premium hose and transmission oil cooler lines for radiator, emissions, vacuum brakes, turbo chargers, heater, air conditioning and power steering applications.
INOAC Chairman Soichi Inoue said the joint venture provides INOAC the firm an opportunity to expand its product offering further into the Asian market.
INOAC manufactures polyurethane, rubber, plastic and synthetic materials products for product applications in automotive, two-wheeled vehicles, information technology and other industries. It is based in Japan and employs more than 23,000, with operations in 16 countries.
Cooper Standard is a global supplier of systems and components for the automotive industry. It employs more than 25,000 in 19 countries.