17 August 2006 - KHS AG, international manufacturer of filling and packaging systems for the beverage, food, and nonfood sectors, has strengthened its presence in China and Asia by acquiring the majority interest in the Chinese Guangdong Light Industrial Machinery Plant 2 Ltd (GLM2).
The relevant contracts have been signed. The transaction is expected to be concluded within the next few months after the required government approvals have been obtained. The former private owners sold their 70-percent share of GLM2 to KHS. Equal shares of the remaining 30 percent remain in the hands of the two managing owners who will continue to be members of the company management.
By acquiring GLM2, KHS once again points the way to the future in the Asian market. KHS just recently increased its participation in the Indian joint venture to 89 percent. In addition, construction of a new KHS plant in India is soon to be completed.
As a manufacturer of filling and packing equipment, GLM2 with headquarters in Shantou, in the province of Guangdong is ideally positioned in the Chinese and Asian market. With a sales volume of more than 30 million euros, GLM2 is one of the market leaders in this branch of industry in China and has an extensive network in China and Asia. GLM2's list of customers include big names in the brewing trade such as Tsingtao, C.R.B., Yanjing, Kingway, Harbin, Asian Pacific, San Miguel, Chonqing, Lion, Jingxing, Heineken, and Anheuser-Busch.
"For GLM2, the close partnership with KHS represents a milestone in the development of the company and opens up tremendous opportunities for both partners in Asian growth markets, particularly in China," said Zheng Jiannong GLM2's Managing Owner.
Valentin Reisgen, Chief Executive Officer of KHS AG: "This partnership largely concludes the development of our international production network. The local presence continually called for by our global customers is now achieved by our plants in North and South America, India, and China in addition to our locations in Germany. We are convinced that with this acquisition we are now well prepared for the future globalization requirements in our branch of industry. With this move, we will continue to be one of the leaders of the market in the growth region of Asia."
The figures substantiate the fact that with this new investment in China, KHS has consistently oriented itself to market requirements. In 2005, approximately 80percent of the demand for packing machines in the Chinese market, which will increase from about €390 million (2002) to nearly €900 million (2010), was satisfied locally. The extent of the demand for modern technical solutions in the future for the beverage sector is illustrated, for instance, by the current yearly beer consumption of 18.8 liters per capita. A high backlog demand is apparent. Experts in the beer sector expect that China will effect 50 percent of the worldwide increase in demand for beer within the next ten years.
In the future, GLM2 will be consistently orienting itself to KHS' concerted worldwide mission and its central message:
KHS is an international company whose products, manufactured in production sites in many regions worldwide, meet maximum quality standards.