Asia Pacific

Bekaert combined sales by industry APAC
Combined sales: € 1 052 million
Capital expenditures (PP&E): € 59 million
Total assets: € 1 115 million
Employees: 10 563

Economic environment in 2016

China's economic growth rate slightly decelerated from 2015 but fell within the government's target of between 6.5 and 7% and outpaced most other major economies. Other regional players such as India and Indonesia expanded their GDP rates on the wave of global growth and increased domestic demand.

Strong automotive markets boosted the growth across the region. Demand from solar markets was strong in the first half of the year, but contracted significantly in the third quarter due to changes in feed-in tariffs in China since July 2016.

India’s economic reform resulted in an impressive 7.5% GDP-rate, despite of the demonetization program which temporarily shocked the economy at the end of 2016. Domestic industrial production output was strong throughout the year. 

Bekaert is present in Asia with manufacturing and development centers in China, India, Indonesia, Malaysia and Japan.

Our activity performance

Bekaert delivered 8.5% organic volume growth in Asia Pacific, compared with 2015. Our activities achieved strong margin growth across the region: underlying EBIT increased by 72% to € 119 million, reflecting a margin of 11.3%. Underlying EBITDA was € 222 million, 25% higher than last year and representing a margin of 21%. ROCE almost doubled to more than 12%.

This robust performance across the whole region was the result of high capacity utilization, M&A activity, an immediate return from capital investments, and significant benefits from various transformation programs. The growing share of high value-adding products in our sales portfolio and the effects of the divested low margin activities, added to the robust profit numbers.

The successful pilot of Bekaert’s customer excellence program in China led to a better prioritization of the capacity available to serve growth accounts with a higher value adding product portfolio. Bekaert’s operations in Indonesia and India performed strongly throughout the year. We have implemented actions to turn around the low performance of the Malaysian activities. At the same time, we are adding tire cord capacity across Asia to meet increased demand from automotive markets.

 Bekaert invested significantly across the region and recorded a total of € 59 million investments in PP&E in 2016, including expansion investments in tire cord activities in China, India and Indonesia.

Transforming for the future

The Bekaert Manufacturing System (BMS) has been successfully implemented in Karawang (Indonesia) and in various manufacturing plants in China: Weihai, Jiangyin, Shenyang and Qingdao. The program continues and will be rolled out in the other Asian plants in the near future.

Transforming also includes restructuring measures for activities without profitable growth potential: we started to phase out the Shah Alam plant in Malaysia and moved certain product lines to the Ipoh facility, also in Malaysia. We also decided to close the small tire cord plant in Huizhou, Guandong province (China). Investment restrictions in Huizhou had put a burden on the plant’s potential to grow scale and improve cost effectiveness to the level of our other operations. Therefore the decision was taken to stop operations there, and invest in other existing locations in the country.

PT Bekaert Indonesia celebrates expansion inauguration

In March 2016, PT Bekaert Indonesia (PTBI), Bekaert’s manufacturing plant in Indonesia, celebrated the inauguration of its Garuda 5 expansion program and the plant’s 20th anniversary. The ceremony took place in the presence of HRH Princess Astrid of Belgium, who was presiding over the Belgian Economic Mission to Indonesia, and Bert De Graeve, Chairman of the Board of Directors of Bekaert. The celebration was attended by Belgian and Indonesian governmental, diplomatic and business association representatives, and by customers and other business partners of Bekaert in Indonesia.

Bekaert-Bridgestone: co-creation at the global level

Bekaert and Bridgestone signed a long-term development partnership agreement by which both parties will continue to jointly develop product and process innovations to enable the design of new, high performing sustainable tires. The development partnership entails concrete research opportunities for Bekaert’s technologists and illustrates the innovation power of our company, as a trusted partner of the largest innovator in the tire industry. The contract was signed in Tokyo during an official ceremony organized at the occasion of the State Visit to Japan of their Majesties the King and the Queen of the Belgians.
 
Bekaert was awarded Bridgestone's first 'Development Contribution Award'.  This award praises the development partner who has achieved major technical developments that create value for Bridgestone’s product portfolio.