Valeo Sells Its Glass Business in Brazil

28 April 1999

Valeo Sells Its Glass Business in Brazil and Redeploys Its Activities in South America

    PARIS--April 27, 1999--The Valeo Group is continuing to reorganize its activities in South America with the sale of its stake in Prismatic, a manufacturer of glass lenses for headlamps, in which Cibie do Brasil Ltda, a Division of Valeo Lighting Systems, has an 80% shareholding.
    Based in Sorocaba in the state of Sao Paulo, Brazil, Prismatic, which generated sales of 5 million euros in 1998 for a workforce of 130 people, has been sold to the European group, Holophane. Noel Goutard, Chairman & CEO of Valeo, indicated that the sale of Prismatic was in keeping with the Group's redeployment strategy of its activities in South America and divestment of non-strategic activities to increase the Group's ROCE. Moreover, in the lighting market, plastic lenses are gradually replacing glass for headlamps.
    Noel Goutard went on to say that the economic crisis affecting this region since the devaluation of the real has led to the rationalization of Group operations in South America. In 1998, Valeo closed down its lighting plant at Minas Gerais, Betim, Brazil and also sold its share in Ergom, a manufacturer of piping for fuel tanks.
    This year, Valeo intends to close three plants in South America. Two plants (Engine Cooling and Security Systems), located in Buenos Aires in Argentina are currently being closed down and the closure of another Engine Cooling plant in Betim is planned.
    Despite the slowdown in its new investments in South America, Valeo is anticipating a rebound in the region's economy and a rise in automotive output in 2000. All of the Group's ten Branches are present in South America and new activities in Brazil will gradually come on stream this year. At end 1999 Group sales in South America are expected to amount to 180 million euros for a workforce of 1,950 people.
    Valeo has built a new production plant at Sorocaba, Brazil, for its Friction Materials business with the aim of enhancing its service to car and truck manufacturers in South America even further. It has been operational for a year now.
    Last March, Valeo Wiper Systems and Electric Motors, Valeo Clutches & Transmissions and Valeo Electrical Systems (alternators and starters) launched two new plants located in Campinas, Brazil. Valeo Distribution is pursuing its globalization: it set up a new distribution center in Sao Paulo, which has been operational since early this year.
    Valeo is an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for cars and trucks. With sales of 6,019 million euros in 1998, it ranks among the world's top ten automotive suppliers. The Group has 114 plants, 29 R&D centers and 13 distribution centers in 20 countries worldwide.
    For more information on the Group and its businesses, please consult our Web site: http://www.valeo.com.