CHANGZHOU, China—Automotive trim material producer Benecke-Kaliko A.G. is expanding its presence in China with the formation of a joint venture and the addition of a new plant.
The company has joined with Jiangsu Changshun Group Co. Ltd. to create the joint venture, which will build the new facility, a ContiTech spokeswoman said. The new site will exclusively manufacture Acella Eco, which the company said is a new environmentally friendly, low emission and allergen free automotive trim material.
Construction has begun on the factory, located in Changzhou. The facility is expected to be completed in the latter part of 2015, the spokeswoman said. Production at the plant will begin immediately thereafter. The company said it already has received its first orders for Acella Eco, due to be delivered in 2016.
Benecke-Kaliko, a business unit of ContiTech A.G., said it is investing nearly $45 million to cover construction of phase one of the new plant, making the project the largest investment in the company's history. It anticipates the work force will be around 250 at the 258,000-sq.-ft. facility.
The new operation, called Benecke-Changshun ECO Trim Co., is being created to handle growing demand from the Chinese automotive industry for the company's eco optimized surface solutions that meet the stringent standards pertaining to air quality of vehicle interiors recently legislated in the country, a company spokesman said.
Construction of the new factory “represents an important cornerstone in our self image in terms of sustainability, environmental responsibility and innovation leadership,” according to Ralf Cramer, a member of the executive board of Continental A.G. and president of Continental China. Continental is the parent of ContiTech.
Benecke-Kaliko's customers in China want to use more sustainable, green products for their vehicles, said Dirk Leiss, chairman of the executive board of the Hanover, Germany-based firm.
“We have been developing low odor and low emission surface solutions and measuring pollutants in vehicles for decades, and in building the new plant we are now making our expertise available to our business partners locally in China as well,” he said.
Only water-based paints are used in the production of Acella Eco, the firm said, maintaining that it is suitable for long-term direct contact with the skin and that it doesn't contain antimony or heavy metals. Its applications include vehicle seats, door trim and decorative surfaces.
Expanding Benecke-Kaliko's presence in the Chinese market “is to our advantage as it enables us to act fast, best support the needs of our customers and excel in meeting the evolving local market requirements,” Leiss said.
The company operates another plant in China, located in Zhangjiagang, that employs about 400. That operation is also a joint venture with Changshun.