| Combined sales: |
€ 998 million |
| Consolidated sales(*): |
€ 945 million |
| Capital expenditures (PP&E)(*): |
€ 48 million |
| Total assets(*): |
€ 1 359 million
|
| Employees: |
11 800 |
| (*) Consolidated entities |
China: economy in transition
After a long period of double-digit growth rates, China’s GDP growth ended below 8% in 2012, further down from 9% the year before. Investments in the country have slowed down as a result of measures for more controlled growth, while the global economic crisis tempered China’s export growth. Combined with a maturing domestic demand in certain sectors, this led to manufacturing overcapacity and fierce competition in several industrial markets.
Bekaert’s activities in China came under pressure due to these developments. The most sudden and tangible impact was felt in the sawing wire business as of the second half of 2011. The price levels of sawing wire further declined significantly in 2012 as a result of the huge manufacturing overcapacity that had been built up in a very short time. Bekaert realigned its manufacturing footprint in China with the new business reality through a drastic restructuring and considerable asset impairments.
In automotive markets too, Bekaert experienced increased competition and maturing demand from Chinese tire producers targeting export markets. Truck tire customers in particular suffered from less export business. Bekaert defended its rubber reinforcement markets and succeeded in obtaining modest growth in sales volumes compared to 2011, while price and margin levels were under pressure due to the highly competitive environment and declining raw materials prices.
Continued growth through acquisition
Bekaert acquired the Qingdao Hansun steel wire plant in Qingdao (Shandong Province) from Hankuk Steel Wire Co. Ltd (South Korea) in September 2011. The operations were fully integrated in the Bekaert China manufacturing platform during 2012. Bekaert (Qingdao) Wire Products Co., Ltd produces a wide range of wires and ropes serving construction and mining markets as well as the hoisting equipment and paper industry.
In December of 2011 Bekaert and Xinyu Iron & Steel Co. Ltd (Xinsteel) announced the closing of their partnership transaction by which Bekaert acquired 50% of the spring wire and Aluclad activities of Xinsteel in Xinyu (Jiangxi Province). The results of the joint venture have been included in Bekaert’s financial records under the equity accounting method as from 1 December 2011. In 2012, the ground works for the construction of a new plant, Bekaert (Xinyu) New Materials Co., Ltd, were started. The new building will house the spring wire manufacturing activities which are now located in two separate factories. The new plant is expected to come into operation in the second half of 2013, and will serve domestic customers mainly, with spring wires for various applications.