Deal gives majority share in Chinese components manufacturer and distributor
Customers of Essentra Components look set to benefit from the completion of a multi-million pound acquisition of Chinese components manufacturer and distributor Jiangxi Hengzhu Electrical Cabinet Lock Co (Hengzhu).
The deal will see Essentra Components obtain a majority share within the business, along with its existing 500-strong workforce, distribution network and product range, with an option to extend to full ownership upon certain agreed milestones being reached.
7,000 customers added to portfolio
The initial acquisition was announced in May, with regulators approving the agreement in full, enabling Essentra Components to take control of the business on 3 August and add more than 7,000 customers to its existing portfolio.
Hengzhu has built a presence in China as a leading manufacturer of access hardware, operating from its manufacturing plant in Yichun. The majority (70%) of Hengzhu’s trade is conducted domestically, laying the groundwork for Essentra Components to expand into new markets with a very strong footprint in place.
“The agreement will pave the way for Essentra Components not only to boost its customer base, but also open the door for existing and future UK and European customers to benefit from new products now, all under one business umbrella,” states the company. With a new a distribution network and customer base, the factory in Yichun will give Essentra Components the opportunity to manufacture high demand products in country.
Greater flexibility and security
Scott Fawcett, divisional managing director at Essentra Components, says China represents a significant market opportunity for its clients: “Thanks to the acquisition, we can offer both our customers and Hengzhu’s customers components expertise across a greater range of products, giving them greater flexibility and security in their supply chains. We’re looking forward to working with the team at Hengzhu to further increase our penetration of the Asian market.”
UK-based Essentra Components has, in recent years, driven growth through strategic expansion of both its product ranges and distribution network, including the introduction of 40% post-consumer plastic LDPE components.
“As well as focusing on a successful integration, Essentra Components will continue its efforts towards a net zero goal,” it adds. “With a drive towards future sustainability, Essentra is offering customers a greater selection of sustainable products as way to reduce their carbon footprints.”