Zhejiang Hongsheng Group Co., Ltd. plans to spend 65 million yuan to acquire German GROSS Textile Machinery Co., Ltd. If the acquisition is successful, Hongsheng Group will expand its market with the resources of Germany GROSSE famous brand and sales network.
Yesterday, Luo Dongsheng, the person in charge of the project of the Science and Technology Information Department of Hongsheng Group, disclosed to the Shanghai Securities News that the project has been approved by the Zhejiang Development and Reform Commission and the entire acquisition project is about to start.
The Hongsheng Group, a wholly-owned enterprise in Dejian, has formulated a complete acquisition plan, and the entire project will be invested in two phases. Luo Dongsheng said that the company will first establish a wholly-owned "GROSSE Precision Machinery Co., Ltd." in Germany to produce and operate electronic jacquard machine products; and through the company's acquisition of the assets of the original German GROSSE Textile Machinery Co., Ltd., the development of international advanced non-heavy wire electronics Jacquard machine. The above operations (including the registered capital of the new company) require an investment of RMB 40 million.
The Hongsheng Group will appoint three expert representatives to serve as directors of the board of directors of the sole proprietorship. The chairman of the board will be elected from the board of directors and will serve as the general manager of the company.
The second phase will invest RMB 25 million to set up a joint development project team, purchase R&D equipment such as machining centers and develop molds, and develop internationally advanced non-heald electronic jacquard machines, gradually forming a batch production capacity of 50 units per year.
The Hongsheng Group expects the investment payback period of the project to be two and a half years. Luo Dongsheng said that after the project is officially put into operation, it is expected to realize sales income of 17.5 million euros, tax 3.26 million euros, distributable profit of 2.93 million euros and investment profit rate of 45%.
The Hongsheng Group expects that the electronic jacquard market will grow substantially in the next few years, and the annual demand is conservatively estimated at more than 10,000 units.
The acquisition of the Hongsheng Group by Rio Tinto Market is clearly based on GROSSE's international brand value and marketing network around the world, as well as patented technology on the heald-free electronic jacquard machine.
Founded in 1878, GROSSE is a family-owned company and one of the first three manufacturers in the world to produce electronic jacquard machines. The company's newly developed non-heald electronic jacquard machine has a number of international patented technologies to fill the international gap. After entering the predicament due to business management and other reasons, it is now hosted by Michael Pluta.
Through the acquisition, Hongsheng Group hopes to enhance the competitiveness of the electronic jacquard machine in the domestic and international markets through the complementary advantages of cost, technology and market; and use GROSSE's patented technology to bring the non-heald electronic jacquard to the market as soon as possible. The German GROSSE company is eager to continue to grow and strengthen the international brand.
At present, GROSSE has established sales organizations in Europe, America and Asia, especially in Europe, America and Southeast Asia. Among them, 70% of electronic jacquard machines in Turkey come from the company. There is currently no representative office in China.
Hongsheng Group is a key enterprise in the “five batches†of Zhejiang Province. It is involved in five major industries, including home textiles, electronics, electromechanical, materials and home ownership. It has more than 20 enterprises. In 2005, the company's annual sales revenue exceeded 1.5 billion yuan.
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