Valeo signs an agreement with its long-standing South Korean partner Pyeong Hwa Group
Paris, February 6, 2017 - Valeo-Kapec, headquartered in Daegu in South Korea, will have a global manufacturing footprint to become the world leader in torque converters for automatic and continuous variable transmissions.
Each partner will contribute to this Joint-Venture its respective Torque Converter business, located for Valeo at Nanjing (China), Atsugi (Japan), San Luis Potosi (Mexico) and Troy (USA) and located for Kapec in Daegu, Waegwan and Seongju (South Korea).
The new company will employ approximately 3,000 people and will be controlled and fully consolidated by Valeo. It is contemplated that the Joint-Venture will generate around €1 billion sales on an annual basis and will be accretive to Valeo’s operating margin for its first fiscal year.
Valeo-Kapec will capitalize on strong geographic, product and business complementarity to create purchasing, manufacturing and, above all, R&D synergies.
The agreement is subject to approval by the competent authorities.
“By strengthening our ties with our long-standing South Korean partner and creating this Joint-Venture, we will double our sales of torque converters for automatic and continuous variable transmissions and become the world leader in this high-technology product line,” said Jacques Aschenbroich, Valeo’s Chairman and Chief Executive Officer. “And by stepping up our presence in South Korea and increasing sales to Hyundai-Kia, we expect our sales in Asia to increase by around €500 million.”
Valeo is an automotive supplier, partner to all automakers worldwide. As a technology company, Valeo proposes innovative products and systems that contribute to the reduction of CO2 emissions and to the development of intuitive driving. In 2015, the Group generated sales of 14.5 billion euros and invested over 10% of its original equipment sales in research and development.
Valeo has 148 plants, 19 research centers, 35 development centers and 15 distribution platforms, and employs 88,800 people in 32 countries worldwide. Valeo is listed on the Paris stock exchange and is a member of the CAC 40 index.