Two South Korean auto parts companies have acquired plants in Hungary in a move to better supply their products to major customers, a trade promotion agency said Thursday.
Shinheung SEC and Youngshin Components have recently wrapped up the process to separately acquire local manufacturing facilities near Hungary's capital city of Budapest to produce car battery and air conditioner compressor parts, respectively, the Korea Trade-Investment Promotion Agency KOTRA said in a statement.
Hungary plant acquired by Shinheung SEC. (Yonhap)
"KOTRA has helped Korean companies advance to overseas markets through mergers and acquisitions M&As. Acquiring a local plant is a shortcut for a Korean company to secure their production facilities and manufacture their products for customers as quickly as possible," a KOTRA official said.
He expected a growing number of Korean companies to opt to acquire a local plant to promote their customers' convenience instead of building a plant, which takes time.
"It takes far less time (for Korean firms) to purchase an existing plant in a foreign market rather than to build a new one.
Hungary plant acquired by Youngshin Components (Yonhap)
"Shinheung SEC acquired a local plant in Hungary as its major customer Samsung SDI Co. has built a plant in the East European country. The acquisition is aimed at better supplying its battery cap assembly and battery can products to the Samsung Group affiliate, the statement said.
At the request of its main customers Mahle and Sanden in Germany, Youngshin Components decided to acquire a local output facility. Demand in Europe for its products such as air conditioner compressor parts, power steering pump parts and water pump parts has been on a sharp increase in recent years, it said.
"The two companies plan to renovate the plants they acquired and bring core production equipment from South Korea to start production soon," the KOTRA official said. (Yonhap)