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Brembo signs agreement to establish a new manufacturing hub for brake systems for passenger cars and commercial vehicles in Chi

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  Published in Business and Finance on Tuesday, December 1st 2009 at 4:40 GMT by Market Wire
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STEZZANO, ITALY--(Marketwire - December 1, 2009) - PRESS RELEASE

For immediate release

Brembo signs agreement to establish a new manufacturing hub for brake systems for passenger cars and commercial vehicles in China:

- foundry machinery of EUR 8.5 million will be purchased;

- the project calls for additional investments of EUR 40 million over 4 years;

- the goal is to triple output by 2013.

Today, Brembo S.p.A. and Donghua Automotive Industrial Co., a member of the Saic Group -- China's leading manufacturer of cars and commercial vehicles -- signed a preliminary agreement for the purchase of foundry plants and equipments, at a price of EUR 8,5 million, in order to establish a new integrated Brembo manufacturing hub in Nanjing, including a foundry and a machining facility for brake callipers and discs for use in cars and commercial vehicles.

For this project, Brembo S.p.A. has formed a new fully owned subsidiary, Brembo Foundry Nanjing Co. Ltd., with share capital of RMB 100 million (equivalent to approximately EUR 10 million).

The agreement will enter into effect on 15 January 2010, once final approval has been given by the competent Chinese authorities.

The new manufacturing hub will become operational in early 2010 and will include new machining facilities with the aim of developing an integrated industrial system capable of offering the Chinese market high-quality, high- technology brake systems.

In order to keep pace with the constant growth of the Chinese automotive market, which is expected to continue in the coming years, Brembo will further invest for the foundry about EUR 20 million in the period 2011- 2014,

In the same period the JV Brembo Nanjing Brake System (70% owned by the Brembo Group and 30% by Donghua) will invest additional EUR 20 million to expand current production capacity.

The JV Brembo Nanjing Brake System currently employs a staff of approximately 300 and is forecast to achieve EUR 22 million in revenue and a positive EBIT in 2009.

Brembo expects to triple its output of brake discs and callipers by 2013.

The JV's main customers are BMW, Daimler, VW, Volvo, Iveco, MG, and Mitsubishi (the latter beginning in 2010).

Donghua Automotive Industrial Co., Ltd. is a large enterprise specialized in the key business areas of auto parts and service & trade. Donghua auto parts products covers forging part, casting part, tooling and equipment, chassis related systems (transmission system, powertrain, brake system, steering system, suspension system etc.), electric meters and trimming. Donghua service and trade business covers logistics, raw & ancillary material trade, import and export trade, real estate development etc.

Brembo SpA is the world leader and acknowledged innovator of the brake disc technology for automotive vehicles. Brembo supplies high performance brake systems for the most important manufacturers of cars, commercial vehicles and motorbikes worldwide, as well as clutches, seats, seat belts and other components for racing only. Moreover, Brembo is also a leader in the racing sector and has won more than 200 championships. Today the company operates in 14 countries of 3 continents, with 34 production and business sites, and a pool of about 5,400 employees (as of 30/09/2009), 8% of whom are engineers and product specialists active in the R&D. 2008 turnover is EUR 1.060 million. Brembo is the owner of the Brembo, Breco, Marchesini, Sabelt brands and operates through AP Racing brand.

The manager in charge of the Company's financial reports, Matteo Tiraboschi, declares, pursuant to paragraph 2 of Article 154-bis of Italy's Consolidated Law on Finance, that the accounting information contained in this press release corresponds to the documented results, books and accounting records.

Investor Relations : Matteo Tiraboschi

Tel. +39 035 605 2899

e-mail : [ ir@brembo.it ]

[ www.brembo.com ]

Media Relations: Francesca Muratori

Tel. +39 035 605 2576

Mobile +39 329 3007882

e-mail : [ press@brembo.it ]

This information is provided by HUGIN