Trelleborg divests automotive rubber component facility

Swedish firm Trelleborg has signed an agreement to divest a facility that manufactures rubber drive shaft and steering boots for light vehicles. The business operation is based in Spain and is part of the Trelleborg Industrial Solutions business area. The buyer is the French Group Delmon Industrie S.A.

Generally, either rubber or thermoplastic elastomer (TPE) is used to produce boots for constant velocity joints and rack and pinion steering systems, and Trelleborg supplies boots made from both materials. The market demand for TPE boots for constant velocity joints and rack and pinion is steadily increasing, while demand for rubber boots is shrinking. Trelleborg is divesting its Spanish business operation as it solely manufactures rubber boots for constant velocity joints. The divestment does not affect Trelleborg’s TPE boots operations.

“The rationale behind this deal is straightforward. There is an ongoing technology shift and TPE boots are rapidly gaining market share at the expense of rubber boots. We will now put more emphasis on the faster-growing part of the light vehicle boot segment. Moreover, the TPE boot segment is a niche where we have a strong global position, and we will continue to capitalise on our technology and global capabilities in this market,” said Mikael Fryklund, president of the Trelleborg Industrial Solutions business area.

“We believe a new owner of the operation is better placed to develop it and able to supplement shrinking production of rubber boots with new products, to maintain the operation in Spain,” Fryklund added.

Sales from the operation in 2013 amounted to approximately SEK 150 million (£13 million). Trelleborg says the transaction will only have a negligible impact on the group’s earnings, and is expected to be concluded in the third quarter of 2014.