New Company Will Manufacture Wheel-End Bearing and Transmission Components for Chinese and Asian Markets
New York, NY (May 2, 2011) – HHI Group Holdings, LLC ("HHI"), the leading manufacturer of forged parts for the North American automotive industry, announced today an agreement with Zhejiang 8+1 Precision Machinery Co. (“8+1”) and C&U Americas, LLC (“C&U”) to form Mapleland Precision Forge Co. Ltd. (“Mapleland”), a new joint venture company that will manufacture highly-engineered wheel-end bearing and transmission components for customers in China and Greater Asia. HHI will own 25% of Mapleland.
HHI’s contribution to the joint venture will consist of three state-of-the-art Hatebur AMP70 high-speed hot forging machines, commonly recognized as the most efficient and technologically advanced forging equipment. Once these world-class machines, together with HHI’s proprietary technical expertise and process know-how, are transferred to Mapleland, the company will possess a significant competitive advantage in the Chinese automotive forging market. HHI retains sufficient capacity to supply forgings to the North America automotive market even at peak historical light vehicle production levels.
The formation of Mapleland will enable HHI to capitalize on significant growth opportunities presented by the Chinese and Asian automotive markets and to supply 8+1’s broad customer base in China and will create the opportunity for HHI to provide further support to its customers which have manufacturing facilities located in China. It is anticipated that Mapleland will open a new facility in Huzhou City, Zhejiang Province, near 8+1’s existing forging and machining park. The facility is scheduled to begin production by the fourth quarter of 2012.
George Thanopoulos, Chief Executive Officer of HHI, and Michael Crosby, Chief Executive Officer of C&U, jointly commented, “We are very excited to create this partnership between our companies. Mapleland will begin operations with enormous manufacturing capacity to serve the Chinese market with industry leading equipment and world--class forging expertise. This initial phase of cooperation focused initially on high-speed hot forgings will pave the way for potential future collaboration in other product areas such as wheel bearings.”
HHI was solicited by numerous leading forging and bearing manufacturers in China with respect to the establishment of a joint venture, but selected 8+1 because of its extensive technical forging and machining expertise, knowledge of the local markets, and substantial customer base including many bearing manufacturers.
Formation of the joint venture is subject to Chinese governmental approval.
About HHI Group Holdings, LLC
HHI is the largest independent manufacturer of highly-engineered symmetrical and asymmetrical forged parts for various power train and wheel-end applications, a leading manufacturer of wheel bearings, and one of the few manufacturers of engine timing drive systems for the North American automotive industry. The company operates through its Jernberg Holdings, LLC, Impact Forge Group, LLC, HHI FormTech, LLC, Kyklos Bearing International, LLC (“KBI”) and Cloyes Gear and Products, Inc. subsidiaries. With over 2,700 employees, HHI is headquartered in Royal Oak, Michigan and operates 14 manufacturing facilities located in Arkansas, Illinois, Indiana, Michigan and Ohio. For more information, please visit www.hhigroupholdings.com.
About KPS Capital Partners
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $21.4 billion of assets under management (as of December 31, 2023). For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies generate aggregate annual revenues of approximately $20.3 billion, operate 222 manufacturing facilities in 26 countries, and have approximately 48,000 employees, directly and through joint ventures worldwide (as of December 31, 2023). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
