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Gibraltar buys metal products plant in China Plant has 60 workers, $10 million in sales

Gibraltar Industries is moving into China.

The Hamburg-based steel and metal building products company, in its third acquisition in less than a week, has bought a factory in eastern China that makes copper-based powder metal products.

Gibraltar officials said the deal gives them a physical presence in the fast-growing Chinese industrial market, where many of its existing customers already are expanding. The products made in the Chinese factory are not expected to be exported to the United States, they said.

"Our opportunity is to manufacture products that will go into the Chinese market," said Carl Spezio, the group president at Gibraltar's thermal processing unit.

Gibraltar's SCM Metal Products business already gets about a third of its sales from exports to customers in Asia, Europe and Central and South America. Spezio said the Chinese plant will help Gibraltar tap into the fast-growing Chinese economy and also give the company an expanded capacity to export products to Korea and Japan.

"This is not our first foray into China. This is our first facility in China," said Ken Houseknecht, a Gibraltar spokesman. "This gives us an on-the-ground presence."

The terms of the deal were not disclosed. The 46,000-square-foot factory currently has 60 employees and about $10 million in sales, and Gibraltar officials said they expect those revenues to double by 2007.

Even then, the year-old factory in Suzhou, China, will be capable of handling much greater volumes. The plant, about 60 miles west of Shanghai, has the capacity to support sales of about $55 million and there is enough room at the site to allow the facility to be doubled in size if business conditions warrant it.

"It has great upside to it," Spezio said.

Because many of Gibraltar's customers already do business in China, Spezio said the company hopes the Suzhou factory will lead to additional opportunities.

"The knowledge we're gaining day in and day out will open up doors for opportunities for other parts of our business," he said. "We can build on these relationships."

The Chinese factory can make a fine grade of copper powder that can be used on products that help dissipate heat from the central processors on computers and on auto parts, which could be a particularly robust market as car and truck sales soar in China, Spezio said.

"It's a brand new operation and it's got state-of-the-art technologies," he said.

Gibraltar already was one of the top three or four manufacturers of copper powder products in the world before the acquisition, and the deal will further expand that business. Gibraltar acquired the plant from an unidentified individual, who once worked for SCM Metal Products as its manufacturing agent based in Taiwan.

The company last week agreed to pay $240 million to acquire Alabama Metals Industries Corp., a Birmingham, Ala.-based metal building products manufacturer that had $285 million in sales last year. It also purchased the Gutter Helmet product line from Tomkins Plc. in a deal that will add about $16 million to Gibraltar's sales.


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