PEGUFORM
Auto supplier regains reputation / New orders help recoup Smart loss / Investment in China and Russia
German automotive supplier Peguform (Bötzingen; www.peguform.de) is well on the way to restoring the good reputation it enjoyed prior to the turbulence at its former private equity owner. One of the reasons for auto manufacturers´ renewed confidence is the German player´s expertise in "just in sequence" deliveries to assembly lines, for which Volkswagen recently awarded it a logistics prize.
In 2005 Peguform posted sales of EUR 1.25 bn and received new and follow-up orders worth EUR 1.3 bn. The Bumpers and Front Ends division accounted for 45% of sales, followed by Cockpits, Instrument Panels and Interiors (36%), Exteriors (9%) and Design and Engineering (7%). Outside the automotive sector, the company currently supplies parts to white goods manufacturer Whirlpool, but this activity is expected to be phased out in the short to medium term.
For 2006, management is forecasting sales of EUR 1.13m. The expected decline against 2005 is due to DaimlerChrysler´s phase-out of the Smart "Forfour" model. Peguform´s EUR 40m intake from the mini car in 2005 was EUR 50m less than planned, in 2006 its Smart revenues will dwindle to only EUR 9m. The poor sales performance of the Seat models "Altea" and "Toledo" will shave an additional EUR 80m off the sales total.
Despite the setbacks – which will impact earnings less than sales – Peguform is performing better than expected this year, CEO Gerhard Böhm remarked at a recent press conference. This is attributed in part to the "Pegu-Best" initiative, designed to reduce the company´s reject rate to 300 ppm by the end of 2007. In 2005, the rate for some parts was three times this figure.
Investment in China and Russia in 2006
Peguform, which employs 6,435 people at 14 plants in Germany, Spain, Czech Republic, Brazil and Mexico, along with two joint ventures, has budgeted capital spending of around EUR 70m in 2006. The focus will be on China, the South American Mercusor region and Russia. The company´s strategic alliance in China with bumper producer Jianyin Mould Plastic Group (JMP, Jianyin) to manufacture for European transplants, which returns annual sales of EUR 250m, could be turned into a joint venture, Böhm said.
In 2005 Peguform posted sales of EUR 1.25 bn and received new and follow-up orders worth EUR 1.3 bn. The Bumpers and Front Ends division accounted for 45% of sales, followed by Cockpits, Instrument Panels and Interiors (36%), Exteriors (9%) and Design and Engineering (7%). Outside the automotive sector, the company currently supplies parts to white goods manufacturer Whirlpool, but this activity is expected to be phased out in the short to medium term.
For 2006, management is forecasting sales of EUR 1.13m. The expected decline against 2005 is due to DaimlerChrysler´s phase-out of the Smart "Forfour" model. Peguform´s EUR 40m intake from the mini car in 2005 was EUR 50m less than planned, in 2006 its Smart revenues will dwindle to only EUR 9m. The poor sales performance of the Seat models "Altea" and "Toledo" will shave an additional EUR 80m off the sales total.
Despite the setbacks – which will impact earnings less than sales – Peguform is performing better than expected this year, CEO Gerhard Böhm remarked at a recent press conference. This is attributed in part to the "Pegu-Best" initiative, designed to reduce the company´s reject rate to 300 ppm by the end of 2007. In 2005, the rate for some parts was three times this figure.
Investment in China and Russia in 2006
Peguform, which employs 6,435 people at 14 plants in Germany, Spain, Czech Republic, Brazil and Mexico, along with two joint ventures, has budgeted capital spending of around EUR 70m in 2006. The focus will be on China, the South American Mercusor region and Russia. The company´s strategic alliance in China with bumper producer Jianyin Mould Plastic Group (JMP, Jianyin) to manufacture for European transplants, which returns annual sales of EUR 250m, could be turned into a joint venture, Böhm said.
20.07.2006 Plasteurope.com [205829]
Published on 20.07.2006
German version of this article...