Doublestar acquiring Hengyu Technology by 899 million, opens the road of domestic tire industry integration
On March 14, Qingdao Doublestar announced that they had signed an agreement with the administrator of Shandong Hengyu Technology Co., Ltd. to acquire Hengyu Technology by 899 million yuan and obtain 100% of its equity. This is also the Doublestar’s once again "take" the acquisition of tire companies, opened the road to integration of the domestic tire industry after the holding of Kumho tires in July last year. After the acquisition, Doublestar will upgrade the existing equipment of Hengyu Technology to help the Chinese tire industry accelerate the conversion of old and new kinetic energy.
Take the lead in setting up a M&A fund to break the old and new kinetic energy conversion
Just as Liu Jiayi, secretary of the Shandong Provincial Party Committee, pointed out at the mobilization meeting of Shandong Province’s work “to take responsibility and implement it” in February this year, if you can’t afford the “tank jars” of low-end production capacity, you can’t let high-quality resources go to high-end industries. And the concentration of projects, it is impossible to make big strides in high-quality development.
Guangrao County is China's famous “tire capital”, and tire production has accounted for a quarter of the country. However, with the structural overcapacity, export and environmental protection issues becoming more and more prominent in recent years, companies with “savage development” of large-scale low-end production capacity have suffered losses or even bankruptcy liquidation.
In response to these circumstances, in June 2017, the Guangrao County Government decided to actively introduce enterprises or listed companies with tire-related industries with a state-owned background as the platform leader and operator of the platform company integrating Guangrao Tire Enterprises, and many tires for Hengyu Technology. The company is reorganized and the county government provides the necessary policy support. In February 2018, Qingdao Double Star took the lead in co-sponsoring the establishment of “Youchuang No.1 Fund” jointly with Guangrao Finance and Shandong Yinji as a platform for mergers and acquisitions and reorganization, accelerating the transformation of new and old kinetic energy in Guangrao tire industry, and integrating Hengyu Technology as a pilot enterprise.
Copy Double Star Transformation Experience Expand and optimize production capacity
Hengyu Technology is a famous tire enterprise in Shandong Province and has been ranked among the top 50 in the rubber industry in Shandong Province. In recent years, due to poor management and other reasons, the company has entered the reorganization stage. At present, Hengyu Technology's production capacity is 6 million sets of car tires and 650,000 sets of passenger car tires. After filling and filling, 10 million sets of car tires and 800,000 sets of car tires can be realized.
Double Star is a state-owned enterprise with a history of 98 years and the only state-owned main board listed company in the tire industry in Shandong Province. Since 2014, Doublestar has seized the opportunity of the fourth industrial revolution in the world to accelerate the transformation of enterprise intelligence. It has taken the lead in establishing the first full-process “Industry 4.0” intelligent factory in the global tire industry, known as the “leader of China tire intelligent manufacturing”. ". At the same time, through the transformation of wisdom, the three systems of “Service 4.0+R&D 4.0+Industry 4.0” have been realized, and four industrial systems including tires, intelligent equipment, industrial intelligent logistics (including robots), and waste rubber green ecological recycling have been formed.
The acquisition is a successful integration of Hengyu's high-quality production capacity by Double Star through industry consolidation opportunities. After the acquisition of Hengyu Technology, it will replicate the successful experience of Double Star Transformation and Upgrade, give full play to the regional advantages of Hengyu Technology, and transform Hengyu Technology into a high-end tire factory in Guangrao County through industrial structure adjustment, new equipment and upgrading. The intelligent model meets the high-end and professional market demand and greatly enhances the company's profitability.
Integrate global plant layout and capacity
Double Star will combine the existing plant layout and production capacity of Double Star, Kumho Tire and Hengyu Technology to integrate global production capacity, maximize their respective advantages, create synergies and achieve coordinated development of the three parties. Double Star can make full use of its advantages in sales, brand and service, and increase its production capacity through Hengyu Technology's factory to further increase its market share at home and abroad. At the same time, the scale advantage will be more obvious after the acquisition, and the competitiveness in procurement, warehousing and logistics will also be greatly improved.
Doublestar Tires were showing at the Tyrexpo Asia 2019