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Eaton signs China joint venture agreement
CLEVELAND, OH...Eaton Corporation announced today that it has signed a joint venture agreement with the Suzhou Electrical Apparatus Group Company (SEAG) in Jiangsu Province, China, to manufacture and sell electrical circuit protection devices for the Chinese market. Eaton's Cutler-Hammer business entity is the world leader in circuit protection technology.
The venture, which will be named Suzhou Cutler-Hammer Electric Co., Ltd., will be 75 percent owned by Eaton, and will be operated by Cutler-Hammer. The project is capitalized at about $17 million, of which approximately $13 million will be provided by Eaton. Sales in the first year, which will include products imported from the United States, are expected to be about $15 million, and accelerate quickly in the next few years. Eaton's worldwide sales in 1995 were $6.8 billion.
Under terms of the agreement, Cutler-Hammer will provide product engineering and technology support in the development of molded case circuit breakers, earth leakage circuit breakers, and other electrical distribution apparatus for industrial and commercial applications. Suzhou will contribute its existing manufacturing facilities and equipment. The venture will operate from two manufacturing sites in Suzhou, which is located about 50 miles west of Shanghai, and employ about 600.
Alexander M. Cutler, Eaton Corporation President and Chief Operating Officer, said "SEAG is a leader in the markets it serves, and molded case circuit breakers are one of Cutler-Hammer's strongest product lines, so we see this agreement as a real benefit to both parties. This new partnership allows Eaton to leverage both of these strengths. The spirit of cooperation and understanding that exists between Eaton and SEAG provides a strong foundation for this joint venture.
"While we have been exporting products to China for some time, this is Cutler-Hammer's first equity-based agreement, and is another example of Eaton's long-term commitment to the world's emerging markets. The products to be manufactured under this accord directly support the development of China's infrastructure and the ongoing improvement of the country's economy. We believe today's announcement will have a very positive impact on our collective futures," Cutler said.
Eaton Corporation is a global manufacturer of highly engineered products which serve vehicle, industrial, construction, commercial and aerospace markets. Principal products include truck transmissions and axles, engine components, hydraulic products, electrical power distribution and control equipment, ion implanters and a wide variety of controls. Headquartered in Cleveland, the company has 52,000 employees and 150 manufacturing sites in 23 countries around the world.