Xibei Bearing's Misery Cooperation with FAG
Resource from: cbcc-yinx
2005/09/14
7 years ago, Xibei Bearing Co.,Ltd(XBC) began to negotiate with FAG on the cooperation case; 3 years later, the joint venture Fuanjie Railway Bearing Co.,Ltd, located in Ningxia Huis Municipality, had been formed; another 2 years later, the joint venture became a Germany funded company; and now the two still keep in touch with each other in their businesses.
Scince its founding in 1965, XBC has experienced three phrases: first, founding in distance countryside(from 1965 to 1981); second, moving to Yinchuan city(from 1982 to 1992); third, transformation and developing(from 1992 to now). They are one of the Top 100 Enterprises in Chinese Machinery Industry, largest bearing enterprise in southwest China and the first publicly traded bearing enterprises in China.
As a result of the defect internal administration, XBC became involved in a financial crisis. They began to seek a partner to help them. At that moment, FAG was planning their expansion in China. XBC seized that chance and contacted FAG for cooperation. After 3 years negotiation, both parties reached an agreement on founding a joint venture. According to their contact, the new joint venture will be operated with FAG's investment and technologies in the existing plant that XBC should provided. Addistionally, related manufacturing equipments were supposed to be provided by XBC. The joint venture will mainly manufacture railway bearings.
However, problems came out from execution of the contract. First, the contracted registered capital from FAG can't be available for pratical use for a long time. In order to meet the macro policy of intensifying attraction of foreign fund, XBC had to continue this contract. Then the German party privately made several significant decision without informing China party, which triggered great dissatisfaction of XBC. After the INA, FAG acquisition in 2002, INA became the new representative of Germany party. But this change didn't make any sense to the cooperation. In the course of this cooperation, German party refused to consider XBC's suggestion on any cases; didn't trust Chinese employers and privately laid off Chinese managers in production, sale and other departments. By the end of 2002, XBC tried in vain to acquire the joint venture from German party.
From 2002 to 2004, the average annual railway bearing output of the joint venture only hit 0.085 million sets, accounting for 40 percent of XBC's former annual output. In 2002, the company loss was over RMB12 million yuan; in 2003, continue a lost of RMB13 million yuan. Calculated by the capital share, XBC altogether loss RMB10 million yuan from 2002 to 2003.At last, XBC sold all their equity in the company at the price of RMB28.5million yuan(XBC took up 49% of the former joint venture's equity). The former joint venture became a Germany funded company.
Now XBC and Fuanjie Railway Bearing Co.,Ltd,the Germany funded company, still keep in touch with each other in business.
Scince its founding in 1965, XBC has experienced three phrases: first, founding in distance countryside(from 1965 to 1981); second, moving to Yinchuan city(from 1982 to 1992); third, transformation and developing(from 1992 to now). They are one of the Top 100 Enterprises in Chinese Machinery Industry, largest bearing enterprise in southwest China and the first publicly traded bearing enterprises in China.
As a result of the defect internal administration, XBC became involved in a financial crisis. They began to seek a partner to help them. At that moment, FAG was planning their expansion in China. XBC seized that chance and contacted FAG for cooperation. After 3 years negotiation, both parties reached an agreement on founding a joint venture. According to their contact, the new joint venture will be operated with FAG's investment and technologies in the existing plant that XBC should provided. Addistionally, related manufacturing equipments were supposed to be provided by XBC. The joint venture will mainly manufacture railway bearings.
However, problems came out from execution of the contract. First, the contracted registered capital from FAG can't be available for pratical use for a long time. In order to meet the macro policy of intensifying attraction of foreign fund, XBC had to continue this contract. Then the German party privately made several significant decision without informing China party, which triggered great dissatisfaction of XBC. After the INA, FAG acquisition in 2002, INA became the new representative of Germany party. But this change didn't make any sense to the cooperation. In the course of this cooperation, German party refused to consider XBC's suggestion on any cases; didn't trust Chinese employers and privately laid off Chinese managers in production, sale and other departments. By the end of 2002, XBC tried in vain to acquire the joint venture from German party.
From 2002 to 2004, the average annual railway bearing output of the joint venture only hit 0.085 million sets, accounting for 40 percent of XBC's former annual output. In 2002, the company loss was over RMB12 million yuan; in 2003, continue a lost of RMB13 million yuan. Calculated by the capital share, XBC altogether loss RMB10 million yuan from 2002 to 2003.At last, XBC sold all their equity in the company at the price of RMB28.5million yuan(XBC took up 49% of the former joint venture's equity). The former joint venture became a Germany funded company.
Now XBC and Fuanjie Railway Bearing Co.,Ltd,the Germany funded company, still keep in touch with each other in business.
(cbcc-yinx)
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1.The news above mentioned with detailed source are from internet.We are trying our best to assure they are accurate ,timely and safe so as to let bearing users and sellers read more related info.However, it doesn't mean we agree with any point of view referred in above contents and we are not responsible for the authenticity. If you want to publish the news,please note the source and you will be legally responsible for the news published.
2.All news edited and translated by us are specially noted the source"CBCC".
3.For investors,please be cautious for all news.We don't bear any damage brought by late and inaccurate news.
4.If the news we published involves copyright of yours,just let us know.
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