ITOCHU Announces the Establishment of a Manufacturing and Sales Business of Trailers in China
－Joint venture agreement signed with the Conglin Group of China －
June 10, 2011
ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that through ITOCHU Metals Corporation (headquartered in Minato-ku, Tokyo; Masaki Oka, President and CEO, hereinafter ITOCHU Metals) and ITOCHU (China) Holding Co., Ltd. (headquartered in Beijing, China; Shuichi Koseki, Chairman, hereinafter “ITOCHU China”) it has concluded a joint venture agreement together with Nippon Light Metal Co., Ltd. (headquartered in Shinagawa-ku, Tokyo; Takashi Ishiyama, President & CEO, hereinafter, “NLM”) and Nippon Fruehauf Company, Ltd. (headquartered in Atsugi-shi, Kanagawa; Yoshinobu Hiki, President & CEO, equity ratio NLM 66%, Isuzu Motors Limited 34%, hereinafter, “Nippon Fruehauf”), with the Conglin Group Co., Ltd. of China (headquartered in Longkou, Shandong, China: Peiliang Zhang, President, hereinafter “Conglin Group”) for the manufacture and sale of trailers in China.
1. The Purpose of the Joint Venture
Nippon Fruehauf, which has about half a century of history in manufacturing truck bodies in Japan and owns the leading domestic market share, has enjoyed a long business history with ITOCHU. Using its technology and development capabilities nurtured through the manufacture of truck bodies, it has also built an impressive track record in the trailer area. The Conglin Group is a corporate group involved in the manufacture and sale of industrial materials ranging from aluminum profiles, cement, and rubbers to machinery. The group includes CONGLIN AUTOMOTIVE COMPANY,LTD. (hereinafter “CONGLIN AUTOMOTIVE”), which manufactures and sells truck bodies and trailers, and Conglin aluminium Co.,Ltd., which manufactures and sells large extruded profiled products, and aims to expand the business of both.
With the sharp increase in the volume of physical distribution in China accompanying the nation’s economic growth, demand for transportation vehicles is increasing. In particular, demand for trailers with a payload larger than that of trucks is growing steadily. However, all trailers currently in use in China are of steel construction, and transportation contractors and business owners are increasingly looking for ways to reduce fuel costs and highway tolls, or to increase payload by making the body lighter. In addition, Japanese companies operating in China having growing needs for high function vehicles that can securely provide transportation quality and efficiency equivalent to those available in Japan, for the distribution of precision machinery and electronic components, or fresh and processed foods.
With demand for lightweight, high functional trailers expected to grow going forward, by introducing the body manufacturing technology that Nippon Fruehauf has nurtured in Japan over the years to CONGLIN AUTOMOTIVE, which already holds manufacturing licensing rights for trailers, and by conducting sales activities that harness the networks of ITOCHU Group, NLM has decided to launch this joint venture to deploy the trailer business in China, to provide the functions being requested by customers.
2. Details of the Joint Venture agreement
- Acquisition of shares of CONGLIN AUTOMOTIVE
A total of 50% shares of CONGLIN AUTOMOTIVE, currently 100% owned by the Conglin Group, shall be acquired by four companies, NLM, Nippon Fruehauf, ITOCHU Metals and ITOCHU China.
- Profile of the Joint Venture
Transfer of shares and registration: (Scheduled for) October 2011
|New Company name||
Shangdong Conglin Fruehauf Automobile Co.,Ltd.(Scheduled *)
Conglin Group 50%
Nippon Fruehauf 20%
ITOCHU Metals 5%
ITOCHU China 5%
- The new company name will be formally registered after a review by the Chinese Government.
In addition, together with the partners, NLM, Nippon Fruehauf, and Shangdong Conglin Fruehauf Automobile Co.,Ltd., ITOCHU will work to establish overwhelming differentiation from local body manufacturers, not just by providing lightweight trailers, but by facilitating improvements in transportation quality and the efficiency of physical distribution in China, while providing products that effectively respond to the demands of the customers.