Domestic
Wuxi Weifu plans more expansion
By Li Fangfang (China Daily)
Updated: 2010-12-25 10:04
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BEIJING - Wuxi Weifu High-Technology Group Co Ltd, China's leading provider of diesel-injection systems with a 50 percent market share, plans an aggressive expansion through financing from a private placement of new shares to its two major shareholders.
The issue of 112.9 million shares priced at 25.8 yuan ($3.9) each was approved by an extraordinary shareholders' general meeting on Friday, and is subject to the approval of the Chinese authorities.
The move increases the holding of the company's biggest shareholder Wuxi Industrial Group from 17.6 percent to 20 percent.
It also means the holding of Bosch, the German technology and service supplier, rises to 14 percent from three percent.
"We will use the financing capital for six projects, including expanding the capacity of our diesel systems, the establishment of an engineering research center, construction of an industrial park, and research and development of vehicle batteries," said Wang Weiliang, chairman of Weifu.
He told China Daily that the company will invest five billion yuan during the next five years to develop the projects, to make Weifu one of the leading companies in China's automotive parts industry.
Furthermore, Weifu will increase its share in Bosch Automotive Diesel Systems Co, Ltd, its joint venture with Bosch based in the city of Wuxi in Jiangsu province, to 34 percent with a one percent share transfer from Bosch.
"With these plans for an increase in shareholding, Bosch and Weifu are clearly demonstrating our common interest in a stable partnership. This alliance supports the Bosch strategy of further strengthening its presence in the Chinese market," said Bernd Bohr, a member of Bosch's Board of Management and chairman of the Bosch Automotive Group.
In increasing its share in Weifu, Bosch will drive forward its localization of diesel systems and components in China. It wants to not only expand its commercial vehicles business, but also open up new fields, such as diesel-powered passenger cars and other automotive products.
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"Based on our joint vision and long-term focused cooperation, Bosch and Weifu firmly believe that we will facilitate the further development and popularity of diesel technologies in China, providing valuable and localized products and services to the Chinese automotive market and assure a significant contribution to Chinese society in terms of energy-saving and emissions reduction."
Established in 1958, Weifu now employs some 7,350 staff members and generated sales of more than three billion yuan in 2009. It expects to have net profit of 1.1 billion yuan this year. The company develops, manufactures, and sells products such as conventional diesel-injection systems, key components for common-rail diesel systems, catalytic converters, and turbochargers, mainly for China's commercial vehicle market.