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February 07, 2018 01:00 AM

Haartz establishes joint venture in China

Chris Sweeney
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    Haartz Corp.
    Haartz's JV in China will service the local automotive market.

    CHUNXIAO, China—Haartz Corp. is taking its global manufacturing footprint to China for the first time.

    The firm recently opened its joint venture with Minth Group, Haartz Minth (Ningbo) Automotive Ltd., and is preparing to service the local automotive market with thermoplastic olefin foils for soft trim applications such as interior door panels, instrument panels and center consoles.

    Haartz Corp. President John Fox said the JV is located at one of Minth's three buildings in Chunxiao, occupying less than 50,000 square feet of space. It currently employs 20 people, but that number is expected to reach 30 by the end of 2018 and increase further as business dictates.

    "China is the largest market in the world now for car production, and that includes car interior production," Fox said. "You'll find all companies represented in China—North American and European OEMs—many of our current customers' ultimate customers would be these North American and European OEs. To some extent, we're being pulled into China by them. At the same time, it's quite obvious that this is a global industry. If we want to be successful in the long term, we must be able to supply our customers wherever they are. The most effective way to do that is with local production."

    The Chinese joint venture is Haartz's third active manufacturing plant—also operating out of its world headquarters in Acton, Mass., and a plant in Mannheim, Germany. The firm is in the process of establishing a fourth site in Pune, India. Fox said Haartz currently has a core team and trading company in the country. The firm is now looking ahead to establishing local production within the next few years.

    Haartz is a Tier 2 automotive supplier that produces surface topping materials in two fundamental product lines—convertible topping materials and surface materials for automotive interior trim applications. The firm primarily deals with TPOs, but also utilizes thermoplastic urethanes.

    Fox said Haartz invested in TPO extrusion at a time when polyvinyl chloride was the primary material for automotive interiors.

    While PVC is still utilized in seating applications, TPO has gradually gained market share in the last 10 years. Fox attributed the growth to TPO's fundamentally lighter properties and its ability to be recycled, something much more difficult to do with PVC.

    As for China, Fox said the growth drivers are similar. In addition to natural growth in the market itself, there is a move toward more luxury vehicles and thus driving interiors to become more upscale and comfortable, driving the need for the kinds of products Haartz provides.

    "The general interest in luxury is fairly universal," Fox said. "People are looking for something that provides a great appearance, a great feel—particularly a soft feel—with very attractive surfaces, including the grain texture on those surfaces."

    Haartz Minth (Ningbo) Automotive is the first joint venture between Haartz and Minth, with Haartz owning a 60 percent stake and Minth the other 40. Minth operates more than 40 sites in China with nine other production facilities worldwide. The firm is both a Tier 1 and Tier 2 automotive supplier, producing molded trim and decorative parts for exterior body, structural body parts, seat frames and roof racks.

    Fox said the key attributes of Minth that made them an ideal partner for Haartz is that they're committed to the market, have an international approach to business and they understand the requirements of doing business with a sophisticated and demanding customer base.

    The executive also stressed that the joint venture is not an export play.

    "This facility in China is to serve the China market," Fox said. "It's not meant to be an export platform, it's meant to serve the local market. This is certainly a global industry, but when you look at the critical point of meeting customer expectations, everything is local. What's required is to have a strong and well-coordinated multinational approach. That's what we're trying to do."

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