Volex PLC Joint Venture (4049D)

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RNS Number : 4049D

Volex PLC

06 July 2016

6 July 2016

Volex PLC

Joint Venture with Joinsoon Electronics Mfg. Co. Ltd

Background to the Joint Venture

Volex plc ("Volex"), one of the world's largest power cord and harness assemblers, announces that it has formed a joint venture with a Taiwan-based manufacturer, Joinsoon Electronics Mfg. Co. Ltd ("Joinsoon") to engage in the development, manufacture and marketing of Volex-branded AC raw cables.

According to the agreement, Joinsoon and Volex will form a joint venture holding company in Taiwan with a manufacturing facility located in Guangdong, China. The joint venture will be named Volex-JEM Cable Precision (Dongguan) Co., Ltd ("The JV Company"), and expects to start production immediately on receipt of the necessary safety approvals.

Benefits to the Joint Venture

The agreement enables Volex to begin production of raw cable used to assemble power cables, and will enable Volex to offer its customers a branded power cable complete with Volex safety certificates, at a highly competitive price. It is estimated it will take 12 to 18 months for the benefits of this joint venture to be fully reflected in Volex's cost structure.

Commenting on today's announcement, Nat Rothschild, Executive Chairman of Volex said, "Today's announcement closes the gap between Volex and its major competitors. We are currently the only major power cable assembler without our own captive source of cable, and by partnering with one of the lowest-cost cable producers we can achieve a cost effective route to vertical integration, and significantly improve our cost structure in this highly competitive industry".

The agreement also envisages further future partnership between Joinsoon and Volex.

Commenting further, Richard Huang, founder & CEO of Joinsoon, said, "Our Volex branded power cable is just the first stage in an even closer cooperation between our two companies. We hope quickly to expand into new areas such as the production of PVC resin as soon as possible".

About Volex

For over 100 years, Volex has been providing customers in the telecom, data-centre, industrial, consumer and medical sectors with a variety of power cords, industry standard cable assemblies, high-speed cable assemblies and connectors. With revenues of $376 million in the year ended 3 April 2016, and a global manufacturing footprint, Volex remains one of the world's largest power cord and harness assemblers (www.volex.com).

About Joinsoon

Established in 1977, Joinsoon Electronics Manufacturing Co., Ltd. (JEM) is one of the world's leading providers of interconnection products and electronics manufacturing services. The company designs and manufactures a broad range of signal cables, medical lead-wires, connectors, computer peripheral antennas, and electronics manufacturing services specializing in data storage devices. Joinsoon has been continually growing, expanding by vertical integration, and upgraded with the latest technology to satisfy the world market and customer needs. The 2015 revenues of JEM were $67 million, and JEM is listed on the Taiwanese stock exchange under the symbol, 3322 TT (www.jem.com.tw).

About Volex-JEM Cable Precision (Dongguan) Co., Ltd

Volex-JEM Cable Precision (Dongguan) Co., Ltd will engage in the development and manufacture of cables comprising various international safety standards including UL, PSE, CCC and VDE, principally used in AC power supply cords and cord sets. The JV Company's manufacturing capabilities will include copper wire drawing, wire stranding, cable extrusion and testing with an annual capacity of at least 24,000km cables, in the initial phase.

Enquiries:

Volex plc

   Daren Morris, Group CFO & Company Secretary                 [phone] 

Joinsoon Electronics Mfg. Co. Ltd

   Jimmy Lin, General Manager                                                  [phone] 

This information is provided by RNS

The company news service from the London Stock Exchange

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July 06, 2016 05:21 ET (09:21 GMT)