GKN OffHighway Purchases Chinese Facility for $16 Million

November 22, 2006 • Armstrong, Iowa-based GKN OffHighway, part of GKN Plc, announced it has further expanded into China through a $16 million acquisition of the Liuzhou Steel Rim Factory in Liuzhou City, China, one of the leading manufacturers of wheels for the off-highway industry. With many of its customers operating in Asia, GKN's acquisition of the Liuzhou facility will help to create a strong presence for GKN OffHighway and its subsidiary, GKN Wheels, in that rapidly expanding market.

 

The Liuzhou Steel Rim Factory, which had sales revenues of $16 million in 2005, employs 550 people and produces wheels for agricultural and construction equipment. It is being acquired by a total consideration of $7 million, which will be satisfied from existing resources. GKN OffHighway will retain the existing workforce when the factory is integrated into the company's global operations.

 

“This acquisition creates a significant position [for us] in China,” said Martyn Vaughan, chief executive of GKN OffHighway. “We intend to expand within this growing domestic market and develop Liuzhou as a low cost manufacturing center to support our customers throughout Asia and beyond.”

 

GKN OffHighway has operated in China for 18 years and currently employs 2,800 individuals across its Driveline, Sinter Metals, and OffHighway operations. The company hopes to expand its Chinese workforce to 6,000 people within four years.