Glaston’s Board of Directors has approved a plan to establish the production of Automotive pre-processing equipment for standard products at Glaston’s factory in Tianjin, China. The aim is to serve customers in the globally largest automotive market with local machine production. The plan is in line with Glaston’s strategic focus to grow its business in China and improve operational efficiency.
Glaston’s addressable global automotive glass equipment market was estimated at over EUR 50 million in 2021, with expected continuous growth. Asia and China, in particular, are major growth regions in the automotive industry. In the previous years, China’s share of the automotive glass new machinery market has been 50−70%(1 of which the majority are standard products. Based on its long experience of operating in the Chinese market and technological know-how, Glaston is well-positioned to tap into the automotive growth in the region.
For more than 50 years, Glaston has served automotive glass processing customers globally from its production site in Switzerland. Ramping up the production at Glaston’s factory in Tianjin, currently manufacturing heat treatment and insulating glass equipment, starts with enhancing local automotive technology know-how and product-specific production skills as well as setting up a local automotive supply chain network to meet required quality criteria. The first products produced in China for the Chinese market are expected to be delivered during the first half of 2023.
Introducing the Automotive offering’s local production in the Chinese market contributes to Glaston’s strategy of profitable growth by improved product offering for the Chinese market as well as productivity improvements. The estimated investment for the implementation of the plan is approximately EUR 1.4 million. Most of the costs and capital expenditure are expected to take place in 2022. The plan enables gradually improving production cost efficiencies of 10−15% starting in 2024. The plan is based on an assumption that COVID-19 related restrictions will gradually ease in China in the second half of 2022. If this will not happen, the timing of the financial impacts will move forward.
“In China for China. Expanding the role of our Tianjin facility will enable us to reach a new automotive glass processing customer segment in China as well as strengthen our position with existing customers. Proximity to the customer is important when addressing our growth ambition in the Chinese market. Glaston has been present in China for more than 20 years. We have a long experience and high readiness and flexibility to serve customers with local production, delivery and services. With this plan we will get a more flexible footprint and cost efficiencies within our automotive business,” says Anders Dahlblom, President and CEO of Glaston Corporation.
Production of Automotive machines in Bützberg, Switzerland will continue to serve Glaston customers outside of China. The Swiss factory will also deliver customized machines to China. According to current estimates, the planned production ramp-up in China has no direct personnel impacts in Switzerland.