Oerlikon Neumag sells carding business

Oerlikon Neumag has sold its carding business to the Zhengzhou Hi-Tech Non-woven Technology Co, a subsidiary of China Hi-Tech.
This transaction is expected to close in the third quarter 2011 and will take retroactive effect from April 1. The sales price is undisclosed.

According to Oerlikon Neumag, its carding business no longer fits the Oerlikon Textile business strategy as it was unable to achieve the targeted profitability levels over the past few years. Looking ahead, Oerlikon Neumag will focus on its business activities in BCF, staple fibre and selected nonwoven equipment. Oerlikon’s site in Neumünster, Germany, is not expected to be affected by the sale.

“Oerlikon Neumag can now fully concentrate on its main business and we ensure that the carding business is placed with a strategically appropriate parent company in future,” said Oerlikon Group CEO, Michael Buscher.
CEO of Oerlikon Textile, Thomas Babacan, said: “We are focusing our organisation on areas where we are strategically well positioned. There is clearly better development potential for the carding business and its employees within the Hi-Tech Group due to the growing importance of China market for carding business and the well established organisation and presence of Hi-Tech group in the related business fields in China.”

The Oerlikon Neumag carding business produces special installations and components for nonwovens production, employing approximately 250 people at three locations in Germany, Austria and Italy. Employees are expected to be transferred to the Hi-Tech Group’s local affiliate.

“We will put the carding business on a solid and future-oriented foundation by selling it to the Hi-Tech Group,” Mr Babacan continued. “The combination of a large market and local supplier access, competencies in carding and a wide range of products of the Hi-Tech Group together with the leading technologies of Oerlikon Neumag’s carding unit will create valuable synergies for customers.

“In addition, Hi-Tech Group is also committed to continuing carding activities and employment in Europe. We believe this sale is the best solution for the carding business and its employees.”

The Hi-Tech Group is one of the largest textile machinery suppliers in China and the second largest globally. In the next three years following the acquisition, the Hi-Tech Group intends to increase investment in Europe with a view to enhancing its R&D ability, alongside optimising resource allocation worldwide. The carding unit will operate as an independent business division, with manufacturing in Europe continuing.

Zhang Jie, chairman of Hi-Tech Group, said: “This acquisition is highly in line with Hi-Tech Group’s corporate strategic goal and will be an important step for our global business development. We are very confident that the synergies between the acquired carding unit and our existing nonwoven business will bring benefits to all parties involved.”