Federal-Mogul (NASDAQ:FDML) announced today that it will establish a new joint venture for large bore piston rings based in Changsha, China. The new JV, Federal-Mogul Zhengsheng (Changsha) Piston Ring Co., Ltd., will provide high technology piston rings primarily for 4-stroke industrial engines in the commercial shipping, railroad, energy and off-road industries. The new joint venture is the second Federal-Mogul large bore ring plant in China and will extend the company's product portfolio of 2-stroke and 4-stroke industrial rings in the Chinese and broader Asian markets. Completion of the transaction is subject to customary conditions, including regulatory approval of the joint venture.
"The market for leading technology and world-class large bore rings is growing as there is increasing demand for industrial engines to meet the latest emissions standards," said Weibo Weng, Vice President, Federal-Mogul (China) Co., Ltd. "This new investment is another important step for Federal-Mogul to localize the supply of globally recognized Goetze® and DAROS® large bore rings."
Occupying 25,000 sq. meters, the new joint venture is located in the Changsha Industrial and Technological Development Zone and will operate within a new facility currently being finalized. The local partner of the joint venture will incorporate its Changsha Zhengsheng Piston Ring Ltd., Corp. into the new JV. The partner will retain a minority share of the business and will remain active in supporting customer relationships and business development.
Federal-Mogul intends to upgrade production lines and to introduce new product technology, including state-of-the-art chrome-ceramic coatings, to produce low-emission, long-life, 4-stroke rings for customers in China.
High-quality piston rings are critical to ensure the smooth and efficient operation in the demanding operating conditions and multi-year duty cycles found in large bore industrial engines. Utilizing integrated global engineering and manufacturing, Federal-Mogul today provides parts and services to worldwide industrial engine manufacturers including MAN, Wärtsilä, Doosan, Mitsubishi, Caterpillar, MTU and other leading manufacturers of industrial engines.
"We look forward to providing products and services to existing customers of Changsha Zhengsheng and to further expand our product portfolio to offer a wide range of high technology piston rings to customers throughout China and Asia," Weng added. "This joint venture gives us new market access and enhances the products and services available to customers in the region."
