SUZHOU, China—Henniges Automotive Holdings Inc. is preparing to increase its footprint significantly in 2018.
The firm already has opened a 79,500-sq.-ft. site in Suzhou, located in the Taicang Port Economic and Technological Development Zone, and has the ability to double in size to support future business growth. The facility will produce both EPDM and thermoplastic vulcanizate weatherstrips for the automotive industry.
Investment details were not disclosed. The project has created 70 new jobs to date and is expected to reach 600 within five years. Henniges President Larry Williams said the next major phase will occur in 2019.
Suzhou is the firm's 23rd global facility—18 manufacturing sites and five research and development centers. It's Henniges' sixth manufacturing site in China, where it also operates a technical center.
"We continue to grow with our global customers," Williams said. "We currently don't have a presence in that region of China. We won some business that's requiring us to have a manufacturing footprint in that region, but it's also opening up opportunities with other customers in the area for us to continue to grow our business. China continues to outpace the rest of the world in terms of automotive production, and we see great opportunities there in that market."
Sealing systems/weatherstrips and anti-vibration parts are Henniges' two major product lines. Williams said the sealing side continues to see strong growth, and initially the Suzhou plant only will produce those products. Henniges' anti-vibration lines in China are produced at its Tieling site, but Williams said the firm is looking to grow that business.
The new site also will employ a quality management system using an electronic display integrated with the company's enterprise resource planning systems to provide instantaneous feedback.
"We believe in using the same equipment and technology anywhere in the world," Williams said. "We don't look to the developing or emerging countries for lower labor costs. We're moving there for the opportunity of growing our business. We put in advanced technology around the world and as we build up this plant, the equipment you see will be the same as it is anywhere else in the world."
Its new plant in China is just the beginning. Henniges said that it has plans to add a new manufacturing plant in South America and a greenfield engineering facility in Europe. Williams said more details on those moves are forthcoming in the first quarter, but the firm is in active negotiations to lease a building in the Sao Paulo region.
The facility will begin producing sealing systems/weatherstrips at the end of 2018 or early 2019.
"Brazil is a market that's been depressed for many years," he said. "We believe the automotive market has hit the bottom and as we follow the trends it's starting to recover. We believe in the recovery of that region and are supporting one of our existing global customers by moving into that region. They've asked us to have domestic production in the South American region to support them."
Williams said its new technical center will be located in the Czech Republic and will act as a centralized location for the firm's engineering activity. Williams said the firm is aiming to finalize details for the project in the first quarter.
The investments will help Henniges—owned by China-based Aviation Industry Corp.—keep pace with the automotive industry.
"It's a fast-changing industry," Williams said. "We continue to see strong growth in China, we see North America about flat next year, but it's a big transition year. With the healthy economy we're seeing pretty much across the board, it makes talent acquisition more challenging. We have to focus on retaining and growing our internal people.
"We're nearing capacity in all of our regions. This is giving us additional capability to support the customer and to support our growth targets as we move forward."