Fuyao Glass to invest $420m in overseas plantsUpdated: 2013-10-24 15:18
Fuyao Glass Industry Group, China's largest automobile glass manufacturer, said on Wednesday it will invest $420 million to set up production bases in the United States and Russia, in a further step to tap into high-end overseas markets.
The company will invest $200 million to build a safety glass plant in the US, and $220 million to establish a base to supply raw materials for its safety glass plant in the Russian market, it said.
"We aim to enter high-end foreign markets by establishing localized production bases to strengthen our cooperation with customers in developed markets, including the US and Russia," Cao Dewang, founder and chairman of the company, told China Daily.
Cao added that developed countries, including the United Kingdom, Germany and Japan, are the group's target markets and accelerating investment into those markets, where most automakers are located, will get the company closer to its target customers.
According to the company, Fuyao is already the biggest auto glass manufacturer in the world, but it hasn't become the main supplier for premium automakers such as Daimler AG's Mercedes-Benz, BMW AG and Bentley Motors Ltd.
Earlier this year, the Fujian-based Fuyao set up an international business department in a move to boost its internationalization process. Last year, sales in overseas markets accounted for 30 percent of the company's total sales revenue, according to Cao.
Fuyao has a share of more than 70 percent of the domestic market, much higher than its 20 percent share globally.
"Because the potential in the domestic market is becoming limited, we are striving to expand into overseas markets and make it a key business strategy in the future," said Cao.
He added that to expand in developed economies, adequate market surveys are necessary and that the investment should be increased gradually.
The company, which opened its first office in the US 18 years ago, plans to establish 10 new plants in the country to increase its production capacity abroad.
The US - the second-largest auto market in the world - is becoming one of the company's most important overseas markets. General Motors Co is the company's biggest customer in the country.
In recent years, Chinese companies have stepped up their investments in the US. For instance, Greenland Group was reported to have jointly invested and developed the real estate project Atlantic Yards in New York City with Forest City Ratner Companies. The total investment is expected to surpass $5 billion.
In 2012, China's investment in the US reached $6.5 billion, up 38 percent year-on-year.
Gregory Gilligan, chairman of the American Chamber of Commerce in China, said that Chinese companies should boost communication when investing in the US to be better understood.