Trumpf, a family-owned manufacturer of CNC sheet metal processing machines and laser systems is buying a majority stake in Jiangsu Jinfangyuan CNC Machine Company Ltd. (JFY), a Chinese company with a similar range of capabilities. The value of the acquisition is unknown, but Trumpf indicated its holding will be about 72%.
According to the buyer, the acquisition of the majority stake was a process that stretched over two years. It also noted that JFY would remain an independent brand in the Chinese market. JFY’s management will remain in place and continue to hold their investment in the company.
“The acquisition of this prestigious Chinese company is strengthening our presence in the world’s most important mechanical engineering market,” stated Trumpf president Nicola Leibinger-Kammüller, in an announcement at the firm’s annual meeting in Ditzingen, Germany. “It is very unusual that a direct investment like this has been made possible for us, as a medium-sized company – and especially in mechanical engineering, which the Chinese government has classified as a key sector.”
Trumpf president Nicola Leibinger-Kammüller
China continues to represent a huge marketing opportunity for machine tool builders, many of which operate there through joint ventures, distributors, or license agreements. Direct investment has been rare for manufacturers of capital equipment.
Trumpf said buying JFY would improve its already solid position in the Chinese market, and give it access to the mid-range of equipment buyers. It also predicted combining the purchasing of Trumpf and JFY in China would achieve cost benefits for the two companies.
“We want to be able to consistently accompany customers as they grow, and as their technological requirements increase,” Mrs. Leibinger-Kammüller explained. “With our alliance, Trumpf and JFY are now in a more powerful position than other providers to give customers products on every technological level, and from the same group of companies.”
JFY is a privately held manufacturer of CNC sheet metal-processing lines – press brakes, shears, turret punch machines, bus bar punch and bending machines, punch-and-shearing machines (FMS) – and is the largest supplier of punching and bending machines in the Chinese market. It is an increasingly important supplier of laser-cutting machines, according to Trumpf.
The Jiangsu Jinfangyuan CNC Machine Company Ltd. (JFY) in Yangzhou, 300 km west of Shanghai, China
The company’s headquarters are in Yangzhou, 300 km west of Shanghai, and it has about 700 employees. Its 2012 revenues from sales were approximately $96 million, according to Trumpf.
Expansion of research and development
While orders received in fiscal year 2012/13 remained at the previous year’s level, the pre-tax result fell to 154 million Euro (previous year’s figure: 211 million Euro). The reason for this was a high level of investment in future sectors. For example, Trumpf invested a total of 211 million Euro in research and development – about 9 percent more than the previous year. “This is the highest amount we have ever spent on research and development in one single year.”
Trumpf has also hired new staff. At the end of the fiscal year on June 30, 2013 there were 1,430 employees working in research and development at Trumpf – 6 percent more than one year previously. In the growth market of Asia, the number of employees increased by 11 percent.
“All this costs money in the short term, but in the long term these investments will pay off – and thinking long-term has always been one of the major strengths of family-owned companies.”
At the end of the fiscal year on June 30, 2013 TRUMPF had 9,925 employees worldwide – 370 more than one year previously.
For further details contact the local agents Retecon (Pty) Ltd on TEL: 011 976 8600 or visit www.retecon.co.za