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PKC Group makes a major breakthrough in China by establishing a joint venture with JAC

PKC Group Plc         Company Announcement 29 March 2016         11.10 am





PKC Group makes a major breakthrough in China by establishing a joint venture
with JAC 



PKC Group has today signed a joint venture contract with Anhui Jianghuai
Automobile Co., Ltd's (JAC) subsidiary Hefei Jianghuai Automobile Co., Ltd
(Hefei JAC). The joint venture shall increase PKC's market share in in China in
both medium and heavy duty truck segments by 5 percentage points and expand
business to buses, light trucks, vans, pick –up trucks and various other light
vehicles. 



The joint venture (JV) shall comprise current wiring harness business of JAC
group with the aim to gradually take-over also other, currently outsourced,
wiring systems business. JAC’s current wiring harness buy is appr. RMB 1000
million p.a. (appr. EUR 140 million p.a. at current exchange rate). The
parties’ aim is to develop JV as a primary supplier for all wiring harnesses to
JAC group. The joint venture will deliver full design & development,
manufacturing and sequence delivery services to JAC group companies. 



JAC’s total sales in 2015 consisted of 588 thousand vehicles and revenue of RMB
47 billion (appr. EUR 6.5 billion at current exchange rate). 



The 50/50 joint venture is accomplished through a new company that will be
established by Hefei JAC and PKC in city of Hefei in Anhui province in China
with an equity value of RMB 100 million (EUR 14 million at current exchange
rate). PKC contributes RMB 50 million (EUR 7 million at current exchange rate)
via equity to be financed from PKC's cash resources. The JV agreement contains
specific terms regarding PKC's right to consolidate. 



President & CEO Matti Hyytiäinen, PKC Group:



We are extremely proud to team up with JAC, which is a one of the leading
Chinese automobile OEMs. This expansion in China is a major breakthrough for
PKC and logical continuity to our strategy published in spring 2013. PKC’s
market position in China will increase significantly. 



JAC is investing heavily to vehicle development and they have clear strategy
how to connect leading global expertize from different disciplines in to their
vehicle designs. By utilizing PKC's knowhow, JAC can focus on their core
activities and further capture growth opportunities in China and global
markets. 



Chairman of Board An Jin, Anhui Jianghuai Automobile Co., Ltd.:



JAC has set a target to gain more market share by meeting various end market
requirements. In order to reach these targets, JAC will invest in improved
quality and performance of our vehicles. More features are added to vehicles
and thus electrical system becomes more complicated and critical. We are very
glad to team up with PKC which brings us world class knowledge on electrical
distribution systems. 





The finalization of the joint venture is subject to usual conditions including
e.g. negotiating the related agreements and obtaining authority approvals. The
finalization is targeted in the second half of 2016, and the joint venture will
be consolidated to PKC Group as of the date of starting the operations. The
joint venture is estimated to generate approximately RMB 350 million (appr. EUR
50 million at current exchange rate) revenue and employ about 1000 people in
its first 12 months of operation. The joint venture is estimated not to have a
significant impact yet on PKC Group's 2016 result. 


PKC Group Plc

Board of Directors



Matti Hyytiäinen

President & CEO



For additional information, contact today at 11-15 Finnish time:

Matti Hyytiäinen, President & CEO, PKC Group Plc, tel. +852 550 788 26



A separate presentation is available at PKC Group's website at www.pkcgroup.com



Distribution

Nasdaq Helsinki

Main media

www.pkcgroup.com



PKC Group is a global partner, designing, manufacturing and integrating
electrical distribution systems, electronics and related architecture
components for the commercial vehicle industry, rolling stock manufacturers and
other selected segments. The Group has production facilities in Brazil, China,
Estonia, Finland, Germany, Lithuania, Mexico, Poland, Russia, Serbia and the
USA. The Group's revenue in 2015 totalled EUR 908.0 million. PKC Group Plc is
listed on Nasdaq Helsinki.