Shanghai Behr Thermal Systems is growing like a rocket. Only seven years old, the company is one of the top suppliers of automotive air conditioning and engine cooling systems in the most populous country on earth. Shanghai Behr credits part of its market growth to having specialist partners like Hydro.
"As one of our core suppliers, we want Hydro at our side in our ambition to increase business volume," says Xu Min, who is director of purchasing and assistant to the general manager of Shanghai Behr Thermal Systems (SBTS).
"The Chinese automotive market is becoming significant. We are receiving high recognition from the customers for our high added-value products. Our first focus is quality, because a good quality product gives us a competitive edge. Hydro offers us the best quality at a good cost level. But this must also improve.
"Hydro has shown commitment with its investment to add capacity here in China. This is positive. We would like Hydro to be committed in every way to our ambitions to grow."
SBTS is a 50/50 joint venture between Behr and Shanghai Sanden Behr Automotive Air Conditioning. The latter is a subsidiary of Shanghai Automotive Industry Corporation, the largest automaker in China.
Behr, which has its global headquarters in Stuttgart, Germany, is one of Hydro's largest customers of aluminium precision tubing. The Tønder plant in Denmark accounts for the largest part of deliveries from Hydro to Behr.
More to come
SBTS purchasing department manager Zhu Jianjun and colleague Xie Zhimin work closely with Hydro's precision tubing plant in Suzhou on products and development.
This covers the products where aluminium is the tubing material in its heat transfer systems, including charge air coolers, oil coolers, radiators and condensers. "Flux-coated products are valued by customers and showing high annual growth," says Zhu.
Shanghai Behr's Pudong plant is operating every day of the year on its three production lines to meet customer demand primarily in China, although the site also delivers to customers in India, Japan and Korea. SBTS intends to build another plant in China and add new lines in Pudong. "We expect our seventh production line in 2014," says Xie.
Cooperation in development
SBTS takes care in developing and retaining a core group of strategic suppliers. Xu explains that the company asks its different departments to give ratings to suppliers, then follows up with annual evaluations. The best are rewarded with business. But becoming part of this select group also implies additional responsibility.
"We ask our core suppliers to share responsibility and accountability. The loyalty is to each other," he says." Hydro is a core supplier. Hydro is in our group."
Zhu says SBTS is satisfied with the service it receives from Hydro and that he is counting on more in future. "They are an expert in aluminium and have different kinds of products that are interesting, like rolled products and welded tubes. New coatings, new alloys or products that are better against corrosion could also be interesting for us," he says.
"When we need technical development, we should have the cooperation. When we need the cost, they need to answer. When we have a new application, we want them to join."
Xu emphasizes that "working together with new value-adding features can reduce the general cost and help increase margins and competence and product quality. This is our common objective. Not just to meet the customer ambition to reduce prices.
"Shanghai Behr is a key player in this market. We think we will develop our position very well. But we will need cooperation from Hydro, as one of our strategic suppliers."