BERGER Group acquires smaller clamping ring producer in China
- Acquisition of HongRen as part of an asset deal
- Ideal access to the Asian business of the internationally leading barrel producer Greif
- Relocation of production to the Chinese plant of Ringmetall in Changzhou
Munich, June 19, 2017 – Ringmetall SE (ISIN: DE0006001902), a leading international supplier in the packaging industry, will take over the Chinese producer of clamping rings and barrel closure systems HongRen as part of an asset deal, as negotiated with the company’s owner family.
HongRen, headquartered in Changzhou, China, generated sales of around EUR 1.2 million in the past financial year 2016 with 29 employees with a clearly positive earnings contribution. The products of HongRen include, besides barrel clamping rings for different application areas, lever closures for industrial drums. The company is above average well positioned in the Chinese market and has long-standing business relationships with key customers in the packaging industry.
„With HongRen, we will integrate a small but very well positioned competitor into Ringmetall Group“, Christoph Petri, Spokesperson of the Management Board of Ringmetall SE, explains the rational behind the acquisition. „At the same time, we will long-term bind the management of the company to Ringmetall and jointly promote the further expansion of activities in the Chinese market.“ Within Ringmetall Group, HongRen ’s activities are integrated into a newly established company, Berger Hong Kong, in which the former owner family Ding will retain a share of 20 percent.
To increase synergies, HongRen’s production will be relocated to the Chinese plant of Ringmetall Group in Changzhou. The goal is to continue and expand the business relationships with customers, to further optimize the company’s high-quality products and to establish an ever-increasing quality awareness in the Chinese market for dangerous goods packaging. „In addition to the growing customer relationships, we will profit above all from the long-term market know-how and the very good customer and supplier relationships of HongRen“, Petri emphasizes. „The increased production capacities are now also enabling us to export to Singapore, Malaysia, Korea and Australia.“ In addition, the production of lever closures is planned to be further increased in output numbers, expanding it to act as an internal supplier of Ringmetall Group.
Due to the administrative deadlines of the Chinese authorities, the Management Board of Ringmetall Group does not expect the transaction to be completed before the fourth quarter of 2017. The involved parties have agreed to remain silence about the purchase price. However, it reflects the commercially conservative nature of the Ringmetall Group.
At present, Ringmetall is in advanced stages of contract negotiations with further target companies. In the current fiscal year 2017, the company expects at least one further acquisition. Further information on the Ringmetall Group and its affiliated subsidiaries can be found at www.ringmetall.de.