PKC Group Plc Company Announcement 4 September 2015 8.00 am
PKC’s joint venture Jiangsu Huakai-PKC Wire Harness Co., Ltd. has been established and started its operations
PKC Group announced on 30 March 2015 that it had signed a frame agreement on 28 March 2015 to establish a joint venture with Jiangsu Huakai Wire Harness Co. Ltd. (Huakai).
The finalisation of the joint venture was subject to usual conditions including e.g. negotiating the related agreements and authority approvals. The conditions have been fulfilled, Huakai’s business has been transferred to joint venture and the joint venture has started its operations.
The joint venture comprises Huakai's current business which develops and manufactures electrical distribution systems to truck, construction vehicle and bus segments in China. The key customers are Foton (and Beijing Foton Daimler Automotive), Kinglong and Iveco. Foton is the fourth biggest truck manufacturer in China with 11% market share in 2014. In 2014 Huakai revenue totalled EUR 43 million with current exchange rate, profitability is at healthy level and at the end of the year 2014 employees amounted to 680. Huakai is a private company owned 100% by family Gu.
The joint venture was accomplished through a new company that was established by Huakai in Danyang, Jiangsu province in China with an equity value of RMB 150 million / EUR 22 million. PKC will contribute in total RMB 150 million / EUR 22 million via share issues to be financed from PKC's cash resources. After the capital increase the total equity value of the joint venture is RMB 300 million / EUR 44 million and PKC owns 50% and Huakai 50%. The joint venture will be consolidated to PKC Group as of the date of PKC’s participation in the joint venture, which in practice means the date when the operations have started.
President & CEO Matti Hyytiäinen, PKC Group:
The joint venture was established in record time thanks to good cooperation between Chinese government entities, Huakai and PKC. Joint venture will incorporate latest technology from PKC and thus is able to develop solutions and services to meet its existing customers’ future needs. I’m also glad to inform that a number of new potential customers are in talk with joint venture. I’m confident that joint venture has good opportunity to become market leading supplier and to grow in a profitable manner.
PKC Group Plc
Board of Directors
Matti Hyytiäinen
President & CEO
For additional information, contact:
Matti Hyytiäinen, President & CEO, PKC Group Plc, tel. +358 (0)400 710 968
Distribution
Nasdaq Helsinki
Main media
www.pkcgroup.com
PKC Group is a global partner, designing, manufacturing and integrating electrical distribution systems, electronics and related architecture components for the commercial vehicle industry, rolling stock manufacturers and other selected segments. The Group has production facilities in Brazil, China, Estonia, Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the USA. The Group's revenue in 2014 totalled EUR 829.5 million. PKC Group Plc is listed on Nasdaq Helsinki.