TIANJIN: British sealing manufacturing giant John Crane EAA has wholly acquired China's domestic sector leader Tianjin Timing Seals Co Ltd for 50 million yuan (US$6.04 million) in a bid to strengthen its presence in China.

Mike Mansell, director of John Crane in Europe, Asia and Africa, said the Tianjin plant will play a significant role in complementing the UK firm's global strategies, especially for the Asia-Pacific region.

He also told China Business Weekly that John Crane is in discussions with three other domestic companies for similar co-operation, but it will take a couple of years to finalize any deals.

He declined to name the potential partners, or the co-operative methods sought.

"We aim to bring our product lines to China to capitalize on the huge market potential of the world's fastest-growing economy," Mansell said.

John Crane has another plant in Tianjin manufacturing automation devices, a joint venture established in 1988.

Wai Sang Hong, general manager of the new venture, John Crane Timing, said the wholly owned subsidiary in Tianjin will serve all of Asia, and that sales revenues are expected to hit 200 million yuan (US$24.15 million) over the next two years.

He said: "We aim to be John Crane's centre in Asia, in terms of research and development, manufacture, sales and service."

Mansell said John Crane believes the wholly owned subsidiary will guarantee a globally unified management and technical level in the new factory.

"Such a co-operation method will make it easier for us to make and implement decisions," he said.

On the other side of the deal, the founder of Tianjin Timing, Wang Yuming, an academic at the Chinese Academy of Engineering, does not mind giving his beloved "baby" to another "family."

Wang quit the academic field at the age of 60 to start Tianjin Timing. In only six years, the firm has achieved a market share of 30-40 per cent in China.

Its dilemma is in financing technological research, market development, and management, which are critical for efficient expansion, Wang said.

"My company is only a domestic leader, and it needs to reach international standards to continue effectively. John Crane will bring what we want," the founder said.

"If I cannot provide a good education for my child, I would rather let him stay with another family that can offer him the best living conditions the world has to offer," he told China Business Weekly.

"A joint venture cannot really boost the development of Tianjin Timing, since foreign firms will not provide essential core technology or the best strategy under such an agreement," Wang concluded after two years of negotiations with John Crane and some other foreign partners.

"It is just like the son is always much closer to the father than the niece. My concern is the development of the firm in the long run, rather than short-term profits," Wang said, stressing that the new venture will still keep Tianjin Timing's trademark and technological developments.

Mansell said the deal represents a co-operation between two market leaders and will enlarge the product line, including both high and low pressure seals tailored to many applications in the manufacturing industry, such as oil, gas, paper and chemicals.

"The move is bound to be of great help in improving the efficiency, quality and sustainability of such relevant industries in China," Mansell said.

"The new firm's market share will at least double in China in the coming years," he said.

John Crane is a subsidiary of the UK's largest engineering company, Smiths Group, founded in 1851 and headquartered in London.

The company has 20 manufacturing bases and 6,000 employees worldwide.

(Business Weekly 12/22/2004 page10)