STIHL and Elrad’s joint venture for electronic components
The two companies have signed a joint venture agreement which was recently approved by the relevant antitrust authorities. The joint venture will operate under the name ZE Electronic Manufacturing Service Ltd. with ZAMA holding 51 per cent of the shares, while the remaining 49 per cent is held by Elrad. The companies have agreed not to disclose financial details of the transaction.
STIHL and the Elrad Group have a close and long-standing working relationship and the joint venture is an important building block in STIHL’s cordless strategy, according to STIHL Executive Board Member for Manufacturing and Materials, Martin Schwarz.
This move also allows the Elrad Group to increase its electronics expertise and expand its vertical range of manufacture and added value in a targeted manner, according to Partner at Elrad Group, Scott Faude.
“We are pleased to be able to further develop our cooperation with STIHL by establishing this joint venture so we can continue to pursue growth together,” Mr Faude said.
ZAMA’s Philippine production site in Santo Tomas in Bataganas province is scheduled to start operation at the end of 2021, leading to the creation of 175 new jobs in the medium term.
STIHL has increasingly opted for a portfolio mix of petrol-powered and cordless products for years and is now focusing particularly on its cordless strategy. The fast-growing cordless segment already contributed some 15 per cent to the STIHL Group’s turnover in 2019.
STIHL’s own highly automated battery pack production has been in operation at its headquarters in Waiblingen since 2019. This has allowed STIHL to build up comprehensive expertise in the cordless sector, with the company delivering battery packs produced in-house directly to customers to meet the ongoing significant increase in demand for cordless products.
About ZAMA Corporation
ZAMA Corporation is a wholly owned subsidiary of the STIHL Group and the world’s largest manufacturer of diaphragm carburettors. To date, the ZAMA Group includes sites in Japan, Hong Kong, China, the Philippines and the U.S. The company supplies carburettors, oil pumps and other precision parts to various manufacturers of chainsaws and garden tools. With a workforce comprising more than 2,400 employees, ZAMA annually manufactures more than 15 million carburettors in 350 different variants.
About Elrad International
Elrad Group has more than twenty years experience as a supplier in the development and production of electronic and electromechanical assemblies for various industries. Elrad Group is involved in several or all stages of the development process for electronic assemblies on behalf of its customers, as a system supplier, with a goal to mass produce these assemblies or fully assembled products. The company employs more than 1,800 people at four locations worldwide (among others in Slovenia).