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CGNNT made BMW 5 Series supplier

2017-06-08

  CGN Juner New Materials Co, a subsidiary of CGN Nuclear Technology Development Co (CGNNT, 000881.SZ) was approved to supply its high-performance engineering plastics to manufacture the bumper for the upcoming BMW 5 Series, the company announced on June 8.

Juner will provide new materials to more than 200,000 BMW 5 Series and 2 Series sedans in the year ahead, according to its deputy general manager Zhang Lei.

According to an industry guideline issued by the Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Science and Technology in April, lightweight auto technology can not only realize targets of energy saving and emission reduction, but also improve the vehicle’s dynamic performance, stability and NVH (noise, vibration and harshness).

The guideline, therefore, calls for advanced automobile materials, such as high-performance plastic parts and composites.

Juner broke the monopolies of foreign competitors to supply bumper materials for BMW since October 2014, which showed signals of the international auto giants’ lowering of production and purchase costs, improving the efficiency of its supply chain, and localization of parts materials.

Insiders estimate that the modified plastic market will reach a size of 1 trillion yuan with an increasing demand for modified plastics with the development of lightweight design in auto industry.

Juner’s development in the past five years supports the estimation. The annual output is 120,000 metric tons and it will reach 200,000 tons when a 400 million yuan ($58.86 million) project in Wenzhou, Zhejiang province goes into operation in the second half of this year.

The lightweight auto will become a blue ocean, which offers domestic modified material producers an opportunity to compete with world-class brands, said CGNNT general manager Zhang Jianfeng.

He also gave recipes for domestic enterprises to deal with the challenges in competition, such as enhancing product quality and stability, avoiding homogeneous competitions, and integrating limited resources.

There will be more and more “Made-in-China” materials used in high-end automobiles that have long been monopolized by foreign suppliers, said Zhang Lei, adding that Juner epitomizes the trend.

Imported modified materials have long been used in BMW, Mercedes Benz and Audi bumpers. BMW has more requirements on the materials for its bumpers and its suppliers are mainly giants in the industry, such as Borouge and LyondellBasell.

Zhang Lei said 10 of Juner’s products are on BMW’s whitelist, four have passed testing and two are on BMW’s procurement list.

The company has organized more than 70 specialists and plans to allocate no more than 5 percent of its sales for research and development, so as to provide auto manufacturers with one-stop solutions for customized materials.

It has built a long-term strategic cooperative relationship with BMW, Audi, Volkswagen, GAC Group, and BAIC Motor, and has more than 500 core customers.

Insiders point out that Juner’s self-developed materials for bumpers can meet customers’ rigorous requirements for the stable quality of raw materials.

Besides bumpers, modified plastics can also be used in other auto parts, such as headlights, engine hood panels, sun visors, dashboards, and steering wheels.

There are about 3,000 modified plastic producers in China. Most of them have an annual output of less than 3,000 tons, and fewer with 10,000 tons. The deficiency of production and quality can barely meet high-end vehicle requirements, which leads to the low degree of localization of plastics specially-developed for high-grade cars.

Zhang Jianfeng said Juner has grown into a leading player in the domestic modified engineering plastic industry and a powerful competitor for European and American suppliers in the bumper material field.

Those who can make breakthroughs in technology, techniques, quality and synergy of industrial chain will stand out in the market, Zhang Lei added.