joint venture of bmw with sgl

8/3/2019 Joint Venture of Bmw With Sgl

1/20

TOPIC:JOINT

VENTURE


2/20

WHAT IS JOINT VENTURE?? Ajoint venture is a business agreement in which parties

agree to develop, for a finite time, a new entity and newassets by contributing equity. They exercise control overthe enterprise and consequently share revenues,assets,etc.

The venture can be for one specific project only - when theJV is referred to more correctly as a consortium - or acontinuing business relationship. The consortium JV

(also known as a cooperative agreement) is formed whereone party seeks technological expertise or technical servicearrangements, franchise and brand use agreements,management contracts, rental agreements, for one-time

contracts. The JV is dissolved when that goal is reached.


3/20

Some major joint ventures include, SONY ERICKSSON ,

MAHINDRA-RENAULT and many more

A joint venture takes place when two parties come togetherto take on one project. In a joint venture, both parties areequally invested in the project in terms of money, time, and

effort to build on the original concept. While joint venturesare generally small projects, major corporations also usethis method in order to diversify. A joint venture can ensurethe success of smaller projects for those that are just

starting in the business world or for establishedcorporations. Since the cost of starting new projects isgenerally high, a joint venture allows both parties to sharethe burden of the project, as well as the resulting profits


4/20

BENEFITS OF JOINT VENTURE Businesses of any size can use joint ventures to

strengthen long-term relationships or to collaborate

on short-term projects. A joint venture can help your business grow faster,increase productivity and generate greater profits. Asuccessful joint venture can offer:

access to new markets and distribution networks

increased capacity sharing of risks and costs with a partner access to greater resources, including specialized

staff, technology and finance


5/20

.

Joint ventures often enable growth without having toborrow funds or look for outside investors. You may be ableto use your joint venture partner's customer database tomarket your product, or offer your partner's services andproducts to your existing customers. Joint venture partners

also benefit from being able to join forces in purchasing,research and development.

A joint venture can also be very flexible. For example, ajoint venture can have a limited life span and only coverpart of what you do, thus limiting the commitment for both

parties and the business' exposure. Joint ventures are especially popular with businesses in the

transport and travel industries that operate in differentcountries.


6/20

RISKS ASSOCIATED WITH A JOINT

VENTURE Partnering with another business can be complex. It takes

time and effort to build the right relationship. Problemsare likely to arise if:

the objectives of the venture are not totally clear andcommunicated to everyone involved

the partners have different objectives for the joint venture

there is an imbalance in levels of expertise, investment orassets brought into the venture by the different partners

different cultures and management styles result in poorintegration and co-operation

the partners don't provide sufficient leadership andsupport in the early stages


7/20

Case study:


8/20

The BMW Group is one of the most successful manufacturers of automobilesand motorcycles in the world with its BMW, MINI and Rolls-Royce brands. Asa global company, the BMW Group operates 25 production and assembly

facilities in 14 countries and has a global sales network in more than 140countries.

During the financial year 2010, the BMW Group sold 1.46 million cars andmore than 110,000 motorcycles worldwide. The profit before tax for 2010 was

euro 4.8 billion on revenues amounting to euro 60.5 billion. At 31 December2010, the BMW Group had a workforce of approximately 95,500 employees


9/20

SGL Group is one of the worlds leading manufacturers of carbon-basedproducts. It has a comprehensive portfolio ranging from carbon and graphiteproducts to carbon fibers and composites. SGL Groups core competencies are itsexpertise in high-temperature technology as well as its applications andengineering know-how gained over many years. SGL Groups carbon-basedmaterials combine several unique properties such as electrical and thermal

conductivity, heat and corrosion resistance as well as high mechanical strengthcombined with low weight. Products from SGL Group are used predominantly inthe steel, aluminum, automotive, chemical and glass/ceramics industries.However, manufacturers in the semiconductor, battery, solar/wind energy,environmental protection, aerospace and defense industries as well as in thenuclear energy industry also figure among the Companys customers.

With 45 production sites in Europe, North America and Asia as well as a servicenetwork covering more than 100 countries, SGL Group is a company with a globalpresence. In 2010, the Companys workforce of around 6,300 generated sales of1,382 million. The Companys head office is located in Wiesbaden/Germany


10/20

.. In an effort to get a leg up on the competition, BMWhas just announced that it has paired up with SGL

Group to produce carbon fiber and textile semi-finished products for vehicle construction to install[carbon fiber reinforced plastic] on a large scale in aseries vehicle at a competitive cost

The joint venture will be operated through two companies, onebased in North America (SGL Automotive Carbon Fibers LLC), andthe other in Germany (SGL Automotive Fibers GmbH & Co KG).The BMW Group holds 49% of the shares, and the SGL Group 51%.

The two groups will be equally represented in the managementof the two companies; major corporate decisions must be madeunanimously by both partners. The joint venture will initiallycreate around 180 new jobs in North America and Germany.


11/20

Two plants are currently under construction; one is located in Moses Lake and one inWackersdorf. They will start supplying products for volume manufacture in 2013, with aninitial capacity of 3,000 t.

Planned factory inmosses lake,USA

Factory inWackersdorf,Germany


12/20

The first series vehicles with a significant amount of carbon fiber-reinforced plastics launched under the new sub-brand BMW i willbe the so-called Megacity Vehicle or BMW i3, which is a battery-

powered vehicle, and shortly afterwards the BMW i8, a sports carwith plug-in hybrid drive.

Currently a state-of-the-art carbon fiber production plant is being built inMoses Lake on 60 acres of land. During the initial phase, US$ 100 million

will be invested and 80 local jobs will be created. It will be the world's mostcost efficient carbon fiber plant using the latest technologies. Similarly tothe BMW Group and the SGL Group sustainability also has a substantialimportance for the joint venture SGL ACF

In the first expansion stage at the Bavarian Wackersdorf Innovation Park,the joint venture SGL ACF is investing around 20 million and createsaround 100 new jobs by 2013. On the existing area of around 10,000 m theproduction line for several thousand tons of carbon-fiber fabrics per year isbeing established. This is the basic material for manufacturing CFRP parts

and components at the BMW Group plant in Landshut, Bavaria.


13/20

The first vehicle to use the carbon fibers manufactured in Moses Lake will be theBMW i3, an all-electric car designed to meet the mobility needs of drivers inhighly populated urban areas throughout the world. Driven purely by electricpower to meet the demands of sustainable and emission-free mobility, the BMWi3 embodies an intelligent form of urban transportation and commuting.

Previously known as the Megacity Vehicle, the BMW i3 will be the first BMWwith the innovative LifeDrive architecture. The Life module part of the design is

the passenger compartment made from high-strength, extremely lightweightcarbon fiber-reinforced plastic (CFRP). The use of this high-tech material acrosslarge sections of the car ensures the Life module is remarkably light helping toimprove the BMW i3s range and performance.

BMW I3 FIRST CAR TO HAVE A CARBON

FIBRE PASSENGER CELL


14/20

The Moses Lake plant covers 60 acres of land with the option to purchaseadditional land for future growth. The plant will initially run two carbon fiberlines, each with an annual capacity of 1,500 metric tons. After a year of designwork with ground-breaking in July 2010, SGL Automotive Carbon Fiberscompleted the new Moses Lake Facility in April 2011 after only ten months ofconstruction.

The Moses Lake carbon fibers will be processed into lightweight carbon fiberfabrics at the second joint venture site in Wackersdorf, Germany. The carbon

fiber reinforced plastic parts and components will be produced from thesefabrics at the BMW plant in Landshut, Germany. The new BMW i3 will bemanufactured from these parts at the BMW Group plant in Leipzig, Germany.


15/20

Success rate of this joint venture It is said that the carbon age has begun with this joint

venture between SGL and BMW .

Their megacity car called I3 is already raging the roadsof highly dense cities of Europe.

Not only this car uses highly prominenent carbon fiberbut also electricity for the power

Noting this success of these two companies we becomesomewhat sure that joint ventures are good fordeveloping new and original projects


16/20


17/20


18/20


19/20


20/20

joint venture of bmw with sgl

Documents