ATS expands automation systems capabilities in China through three strategic investments
TSX: ATA
CAMBRIDGE, ON, May 17 /CNW/ - ATS Automation Tooling Systems Inc. today
announced that it has entered into a strategic relationship with GD
Technologies, a private Chinese-based precision machining company, and is
expanding two automation systems facilities in China to further its growth
strategy in Asia.
GD Technologies is a rapidly-growing high precision machining company
that serves the computer-electronics, disk drive, healthcare and other
industries. Established in China in 2003, it has extensive local contacts,
assembly, test and supply chain management capabilities and operations in
Shanghai and Dongguan. To formalize its relationship with GD Technologies, ATS
has acquired a minority ownership interest in the business for approximately
Cdn $2 million. Proceeds from the ATS equity subscription will be invested by
GD Technologies to support its continuing growth. ATS and GD Technologies have
also agreed to co-locate in adjacent leased facilities in both Dongguan and
Shanghai to increase operational efficiencies and better serve customers.
"I'm very pleased that we're elevating our already successful supply
relationship with GD Technologies to a strategic one," said Ron Jutras, ATS
President and CEO. "It is a successful, highly regarded and rapidly growing
precision machining business in China led by a very capable and respected
leader, Jeremy Ng. Today's announcement adds significant and immediate
capabilities to ATS in China to support customer needs and accelerated growth
potential for both ATS and GD. This expanded relationship will encompass
supply, joint marketing and customer development. Our equity investment in GD
further solidifies this now strategic relationship and also enables ATS to
participate in the continuing success of the GD business."
ATS Capacity Expansions in China
The ATS facility expansion will see the Company increase its
manufacturing presence in China by relocating the respective ASG operations in
Dongguan and Shanghai to new, larger leased spaces. Both relocations are
expected to be complete during the first quarter of fiscal 2007 (three months
ended June, 2006) and will bring the ASG facility in Dongguan to
39,000 sq. ft., an increase of 35,000 sq. ft. and the Shanghai facility to
13,000 sq. ft., an increase of 7,000 sq. ft.
"Today's announcement represents the next phase of our internal expansion
plans in China," said Mr. Jutras. "Our automation systems presence in China
dates back to 1996 through our facilities in Tianjin and more recently in
Shanghai and Dongguan, in the southern region of China. These operations have
already established a leading presence for ATS in China and provide us with a
solid platform to accelerate our growth and take better advantage of the
rapidly-developing manufacturing market in China. Our global customers are
increasingly expanding their base of manufacturing in China, providing a great
opportunity for ATS to continue to build our strong trusted relationships with
key customer accounts and successfully grow our business in China as well as
in North America and Europe."
ATS in Asia
As the leader in the Asian automation market, ATS will have over
150,000 sq. ft. of manufacturing space in the region and over 300 employees,
with three manufacturing facilities in China in the regions of Dongguan,
Shanghai and Tianjin and manufacturing facilities in Penang, Malaysia and
Singapore. ATS also has sales and service offices located in Teparuk, Thailand
and Wuxi, China. In fiscal 2005, ATS doubled its revenue generated from the
region over the previous year to approximately $82 million.
About ATS
ATS Automation Tooling Systems Inc. (www.atsautomation.com) is the
industry's leading designer and producer of turn-key automated manufacturing
and test systems, which are used primarily by multinational corporations
operating in a variety of industries including: healthcare,
computer/electronics, automotive, and consumer products. ATS is also an
emerging leader in the rapidly growing market for solar energy cells and
modules. The Company also makes precision components and subassemblies using
its own custom-built manufacturing systems, process knowledge and automation
technology. ATS employs approximately 3,900 people at 26 manufacturing
facilities in Canada, the United States, Europe and Asia-Pacific. The
Company's shares are traded on The Toronto Stock Exchange under the symbol
ATA.
Note to Readers
This press release contains certain statements that constitute
forward-looking information within the meaning of applicable securities laws
("forward-looking statements"). Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of ATS, or developments in ATS' business
or in its industry, to differ materially from the anticipated results,
performance, achievements or developments expressed or implied by such
forward-looking statements. Forward-looking statements include all disclosure
regarding possible events, conditions or results of operations that is based
on assumptions about future economic conditions and courses of action.
Forward-looking statements may also include, without limitation, any statement
relating to future events, conditions or circumstances. ATS cautions you not
to place undue reliance upon any such forward-looking statements, which speak
only as of the date they are made. Forward-looking statements relate to, among
other things, GD Technologies' intended use of proceeds, co-location of ATS
and GD Technologies to increase operational efficiencies and better serve
customers, accelerated growth potential, the continuing success of the GD
business, timing of completion of facility expansion in Dongguan and Shanghai
and the manufacturing expansion of ATS's global customers in China. The risks
and uncertainties that may affect forward-looking statements include, among
others, general market conditions, change in GD Technologies' intended use of
proceeds, the ability of ATS and GD Technologies to realize upon potential
benefits of co-location, the ability of ATS and GD Technologies to formulate
and execute upon their long range plans, the performance of existing
competitors or introduction of new competitors in the region, the ability of
ATS and GD Technologies to retain key personnel, availability of construction
materials and labour, and other risks detailed from time to time in ATS'
filings with Canadian provincial securities regulators, including ATS' Annual
Report and Annual Information Form for the fiscal year ended March 31, 2005.
Forward-looking statements are based on management's current plans, estimates,
projections, beliefs and opinions, and ATS does not undertake any obligation
to update forward-looking statements should assumptions related to these
plans, estimates, projections, beliefs and opinions change.
%SEDAR: 00002017E
For further information: Carl Galloway, Vice President and Treasurer, Gerry Beard, Vice President and Chief Financial Officer, (519) 653-6500