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.
"TG is a top class global supplier of weatherstrips," a company spokesman said in an email. "Its abundant expertise in product development and quality improvement of the product will help Hubei Rock meet needs from auto makers and thereby support its growth in the region."
Based in Shiyan, China, Hubei Rock is an independent supplier that provides both EPDM and thermoplastic vulcanizate-based weatherstrips, mainly to Dongfeng Motor Corp., which Toyoda Gosei described as one of China's "big three" auto makers. It employs 281 people at its 465,000-sq.-ft. facility and generated $11.8 million in sales in fiscal 2017. The building sits on about 840,000 square feet of land.
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.
The spokesman said that Toyoda Gosei received requests from auto makers, most notably Honda, to expand further into the region. Honda operates a manufacturing company jointly with Dongfeng in central China.
Dongfeng represents a new customer for Toyoda Gosei. The spokesman said Hubei Rock's partnership with Dongfeng and other auto makers in the region was what made it so attractive.