Leoni opens new wiring systems plant in Jining, China

Monday, Nov 07, 2011

Leoni, the leading provider of cables and cable systems to the automotive sector and other industries, opened another production facility in China today. The plant will produce wiring systems for the Chinese car market. The overall amount invested totals about 23 million euros. The Group is significantly enlarging its capacity in other countries as well.

“With this expansion of capacity we will have made sure of being able to fulfil all existing contracts. In addition, we are prepared for ongoing growth,” Uwe H. Lamann, member of Leoni AG’s Management Board in charge of the Wiring Systems Division, said in giving the reason for investing in the new factory. Leoni is benefiting in China on the one hand from rising demand for established vehicle models, for which the Company provides wiring systems. On the other hand, Leoni obtained several contracts for additional model ranges of various manufacturers. Three projects, above all for General Motors, will ramp up in Jining until the end of this year.

The new facility has more than 25,000 square metres of production area and will employ about 1,600 people when series production commences. The number of employees is to rise to 3,000 in the medium term. With its geographic position between Shanghai, Beijing and the port city of Qingdao, Jining meets all the logistical requirements for being able to supply various customers quickly and reliably. Also within easy reach are the plants in Weihai and Penglai, which are currently still being operated via the joint venture with Daekyeung and will at the turn of the year be transferred fully to Leoni ownership.

Group-wide and including the joint venture plants, Leoni now has 11 facilities in China with a total of about 6,000 employees. In terms of consolidated sales, which in the current financial year will amount to about 350 million euros, China meanwhile represents the third largest market after Germany and France. The Company has been operating for 18 years with its own facilities in China.

To be able to satisfy the heavy demand from the automotive industry for cable harnesses and wiring systems, and especially to be able to supply for new vehicle models, Leoni is also setting up new production lines and expanding existing plants in other regions. The Wiring Systems Division alone currently has 12 capital investment projects, involving for instance plans for two new facilities in Egypt as well as one each in the Ukraine and Russia. Furthermore, there will be additional production halls in Brazil, Mexico, Morocco, Tunisia and Serbia among other places. After the expansion is completed, the Wiring Systems Division’s network will comprise more than 30 production facilities with a total of more than 550,000 square metres of factory floor space.

Source: Leoni