KIYOSU, Japan—Toyoda Gosei Co. Ltd. is purchasing a majority stake in Hubei Rock Rubber and Seal Technology Co. Ltd. to strengthen its automotive parts business in China.
The deal is expected to be complete in December, according to an Oct. 30 news release. Toyoda Gosei said it will pay about $7.12 million for a 60 percent stake in Hubei Rock from its parent company Hubei Zhengao Automotive Accessories Co., which will hold the remaining 40 percent as a minority joint venture partner.
Based in Shiyan, China, Hubei Rock is an independent supplier that provides weatherstrips mainly to Dongfeng Motor Corp., who Toyoda Gosei described as one of China's "big three" auto makers. The company also supplies to Dongfeng's joint venture companies with Japanese and other foreign manufacturers, including Dongfeng Honda Automobile Co. Ltd. and Dongfeng Peugeot-Citroen Automobile Co. Ltd.
It employs 281 people from its 465,000-sq.-ft. facility and generated $11.8 million in sales in fiscal 2017. Toyoda Gosei said the building sits on about 840,000 square feet of land.
With this partnership, Toyoda Gosei's production network in China will expand to four locations—TG Star Light in northern China, Foshan TGR and Fu-Yue in southern China, and now Hubei Rock in Central China. Toyoda Gosei said it considers China a crucial market and will continue to strengthen its development and production networks there.
The official name of Hubei Rock will change to Hubei Toyoda Gosei Zhengao Rubber and Seal Technology Co. Ltd.