Johnson Controls to build 4th automotive battery plant in China

Company forms joint venture with Binzhou Bohai Piston Co., adding capacity to meet growing demand for fuel efficient technology

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Johnson Controls

Jun 09, 2016, 07:00 ET

MILWAUKEE, June 9, 2016 /PRNewswire/ -- Johnson Controls is forming a joint venture with Binzhou Bohai Piston Co., Ltd., an auto parts affiliate of Beijing Automotive Industry Group Co., Ltd. (BAIC Group), to build its fourth Chinese automotive battery manufacturing plant. Aimed at serving both automakers and aftermarket customers, the facility will be located in Binzhou, Shandong Province.

Johnson Controls forms joint venture with Binzhou Bohai Piston Co., to add capacity to meet growing demand for fuel efficient technology in China. By 2020, 50 percent, or about 15 million new vehicles will be equipped with start-stop functionality in China, saving an estimated 1.2 billion liters of gasoline per year. At full capacity, the more than $200 million USD plant will employ 650 people who will manufacture both conventional flooded and absorbent glass mat (AGM) battery technologies.

"We understand China market dynamics, consumer demands and both short and long-term energy storage technology needs," said Joe Walicki, president, Johnson Controls Power Solutions. "This joint venture is a strategic move to position Johnson Controls and Bohai Piston to take advantage of what will be the world's largest automotive battery market by 2020."

At full capacity, the more than $200 million USD plant will employ 650 people who will manufacture both conventional flooded and absorbent glass mat (AGM) battery technologies. AGM powers start-stop systems, which increase vehicle fuel efficiency up to 5 percent, helping automakers meet increasingly strict environmental regulations.

"In the China market there is strong demand for auto part technologies that can improve fuel efficiency and there will be rapid growth for AGM batteries in start-stop vehicles," said Han Yonggui, BAIC Group director and chairman of Beijing Hainachuan Automotive Parts Co., Ltd. (BHAP). "The new joint venture will position both companies to take advantage of this market opportunity and we believe our cooperation with Johnson Controls, the global automotive battery leader, will help promote leading products and technologies in China."

By 2020, 50 percent, or about 15 million new vehicles will be equipped with start-stop functionality in China, saving an estimated 1.2 billion liters of gasoline per year. It also reduces greenhouse gas emissions by 2.8 million metric tons per year.

"With the combination of Johnson Controls leading technologies, large market demand from BAIC Group members and from the aftermarket, as well as favorable investment conditions in Binzhou, we believe the joint venture will be a great success," said Lin Fenghua, chairman of Binzhou Bohai Piston Co., Ltd.

"Our technology and battery capabilities, combined with the Bohai Piston growth platform and favorable Binzhou location, is a real winning combination," said Kenneth Yeng, vice president and general manager, Johnson Controls Power Solutions China.

Construction of the state-of-the-art facility is expected to begin in 2017, with production starting two years later. Once up and running, the plant will be able to produce 7.5 million batteries per year.

"Johnson Controls remains committed to serving our customers wherever they are in the world with investments such as this manufacturing plant and joint venture, which brings our leading technologies and global best practices to China," said Trent Nevill, president, Johnson Controls Asia Pacific.

Approximately 23.5 million new vehicles were produced in China in 2015, making it the world's largest automotive market. In 2015, Johnson Controls announced it signed an agreement to build a new battery manufacturing facility in Shenyang, China. It is expected to start operations in 2018. The company also has battery plants in Chongqing and Changxing, and an energy storage research and development center in Shanghai.

For images of the signing ceremony, as well as AGM battery technology, please click here.

About Johnson Controls:
Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries. Our 150,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and seating components and systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful. In 2016, Corporate Responsibility Magazine recognized Johnson Controls as the #17company in its annual "100 Best Corporate Citizens" list. For additional information, please visit http://www.johnsoncontrols.com or follow us @johnsoncontrols on Twitter

About Johnson Controls Power Solutions
Johnson Controls Power Solutions is the world's largest manufacturer of automotive batteries, supplying approximately 146 million every year to automakers and aftermarket retailers. Our full range of lead-acid and lithium-ion battery technology powers nearly every type of vehicle for our customers- including traditional, start-stop, micro-hybrid, hybrid and electric. Johnson Controls' recycling system has helped make automotive batteries the most recycled consumer product in the world. Globally, 15,000 employees develop, manufacture, distribute and recycle batteries at more than 50 locations.

About BAIC
Founded in 1958, BAIC Group covers a wide range of businesses from vehicle manufacturing, research and development, auto parts manufacturing, automobile service and trade, to general aviation investment and financing. It has automotive manufacturing joint ventures with Hyundai, Mercedes Benz, and a number of self-owned brands like BEIJING, Senova, Changhe Auto and Foton.

About Bohai Piston
Shandong Binzhou Bohai Piston Co., Ltd. (Bohai Piston hereinafter) located in Binzhou, Shandong province, is the biggest Piston Manufacturer in China and among the top 4 piston suppliers worldwide. In June of 2015, state-owned shares were transferred to BAIC Group and in 2016, Bohai Piston became a shareholder of BJEV.