Silvermines Group’s new joint venture in power steering systems for the automotive sector will boost turnover £30m-£50m by 2000 and help reduce borrowings, according to Clem Jansen, group managing director.
The new company, Automotive Motion Technology, will be 49% owned by electronics and electrical group Silvermines and 51% by the $3bn turnover Connecticut-based company Echlin.
From next January a highly automated factory at Feltham in Middlesex will manufacture electrically powered hydraulic steering (EPHS ) for cars and trucks.
Two contracts worth a total of £11m over six years have been secured for the EPHS systems. By 2004 the total market in the European Union and the US for EPHS is forecast at £1bn.
The joint venture will result in a net inflow of £1.9m from Echlin to Silvermines which will go towards reducing gearing, which was 18%, down from 31% in 1995.
Silvermines last week reported an 18% rise in pre-tax profits for 1996 from £3.5m to £4.1m. Group turnover rose 21% from £54m to £65m.
EPHS offers low fuel consumption and flexibility in locating the power pack.
Jansen, who joined Silvermines as managing director from GEC in 1987, is positive about prospects for the group’s other divisions. Aerospace components, closed circuit television products and broadcast and television systems will grow annually by 15-20%, said Jansen, while electrical controls, which is project-led, will be more variable.