Waiblingen, 3/11/2021 | Company press release
The STIHL subsidiary ZAMA Corporation and Elrad International Group have established a joint venture for the manufacture of electronic assemblies. Both companies have signed an agreement on a joint venture for this purpose and have already concluded it after approval by the relevant competition authorities. The joint venture operates under the name ZE Electronic Manufacturing Service Ltd.; ZAMA holds 51 percent of the shares, with the remaining 49 percent held by Elrad. The companies have agreed not to disclose financial details of the transaction.
STIHL and Elrad Group have a close and long-standing working relationship. “For STIHL, the joint venture is an important building block in our cordless strategy,” highlights Martin Schwarz, STIHL Executive Board Member for Manufacturing and Materials. “In this way, we are strengthening our electronics expertise and specifically increasing our vertical integration and added value.” Scott Faude, Partner at Elrad Group, adds: “We are delighted that, with the establishment of this joint venture, we can expand our collaboration with STIHL and continue our growth course together.” The new company will start operating at the end of 2021, at ZAMA’s Philippine production site in Santo Tomas, Batangas province. In the medium term this will lead to the creation of more than 175 new jobs.
For a number of years, STIHL has increasingly relied on a mixed portfolio of gasoline-powered and cordless products; it is now systematically continuing to strengthen its cordless strategy. The fast-growing cordless segment already contributed around 15 percent to the STIHL Group’s revenue in 2019. An in-house, highly automated battery pack production system was put into operation at the parent company in Waiblingen in 2019. This has enabled STIHL to establish comprehensive expertise in the cordless sector. The company delivers in-house-produced battery packs directly to customers to meet the ongoing significant increase in demand for cordless products.
ZAMA Corporation is a wholly owned subsidiary of the STIHL Group and the world’s largest manufacturer of diaphragm carburetors. ZAMA Group currently operates locations in Japan, Hong Kong, China, the Philippines and the USA. The company supplies carburetors, oil pumps and other precision parts to various manufacturers of chainsaws and garden power tools. With a workforce comprising more than 2,400 employees, ZAMA manufactures more than 15 million carburetors annually, in around 350 different variants.
Elrad Group has more than twenty years of experience as a supplier in the development and production of electronic and electromechanical assemblies for various industries. As a system supplier, Elrad Group is involved in several or all stages of the development process for electronic assemblies on behalf of its customers. The goal is to produce these assemblies or fully assembled products in large quantities. The company employs more than 1,800 people at four locations worldwide, including in Slovenia.