DELICIAS, Mexico—As one major hose supplier transitions its Mexican production campus from industrial molded hose manufacturing to on-highway hose production, another major hose supplier will benefit as it focuses its North American business in the off-highway market.
Imperial Auto Industries Ltd., based almost exclusively in India with a U.S. auto parts facility in Indianapolis and another manufacturing plant in Germany, said May 20 it acquired a portion of the industrial molded hose assets from a Continental A.G. plant in Delicias, Mexico, part of ContiTech USA Inc.
Imperial said it plans to move the production machinery that it purchased from Continental—all rubber hose extrusion reinforcement processing equipment—to a new facility in Sanand, India, in Gujarat Province, which is supported by an existing mixing plant there. Imperial said it intends to increase capacity by about 5 percent at its four existing production facilities in India, which produce a combined 150,000 hoses per day.
Terms of the transaction, finalized May 20, were not disclosed.
"Continental approached Imperial," said Tom Snyder, managing director of Imperial Auto U.S. "We knew each other, and each had its own idea of its core markets. For them, on-highway auto is a core space, while Imperial Auto in North America is off-highway truck, high-mix, larger diameter hoses. That is the difference."
A Continental spokesperson said the company will fill the production space that housed the industrial molded hose equipment with production assets related to on-highway vehicle hose manufacturing, specifically as it relates to increased capacity for hose components for electric vehicles, or EV-related mobile fluid hose production. Continental owns two facilities in Delicias, an 8,000-sq.-meter building and a 28,000-sq.-meter facility.
The spokesperson said there will be no job cuts at the 400-person campus in the state of Chihuahua, located in the north-central portion of the country.
"Continental is redirecting its strategic focus toward future mobility in the automotive market for its hose plant in Delicias, Mexico," said Osvaldo Baltazar, communication and governmental affairs manager for Continental North America. "To ensure continued investment in the business, Continental is selling a portion of the industrial molded hose production assets to Imperial Auto Industries, which will ensure sustained growth and opportunities."
Snyder said Imperial maintains a "last man standing" philosophy related to hose production for internal combustion engines, as the off-highway segment is predicted to be one of the last to transition to EVs. This capacity increase is crucial to that philosophy, he said.
"But we also have plenty of research and development projects as they relate to the EV revolution, with E-buses and other off-highway EV segments," Snyder said. "It keeps evolving. As we have core competencies in the molded hose segment, they could be applied to emissions controls and new technology that has yet to be introduced where columns of air or fluid need to be managed.