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Selle Royal Gains Access to Asian Industry & Markets

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Selle Royal SpA has taken over Jiangyin Justek Vehicle Co. Ltd. which is the largest saddle maker in China. The acquisition provides Selle Royal access to Asian OE bike makers as well as the fast growing Asian consumer markets. With the purchase of

Selle Royal Gains Access to Asian Industry & Markets

POZZOLEONE, Italy – Selle Royal SpA has taken over Jiangyin Justek Vehicle Co. Ltd. which is the largest saddle maker in China. The acquisition provides Selle Royal access to Asian OE bike makers as well as the fast growing Asian consumer markets.

With the purchase of 52% of the shares of Jiangyin Justek Vehicle Co. Ltd., Selle Royal buys the two factories Justek operates in China. They are based in Jiangyin and in Tianjin where lots of bike makers are located. The two Justek factories produced in 2009 about 12 million saddles and employ 800 people. The Justek range is focused on middle-low products and includes gel saddles, gender specific models as well as saddles with elastomer struts.

With Justek Selle Royal becomes the biggest producer of bicycle saddles in the world. The Italy based company now has five saddle manufacturing plants in strategic locations around the world: one in Italy and one in the UK to supply the European markets, one in Brazil to service the South American markets, and now two Justek factories in China, to supply the Far Eastern markets, including Asian bicycle assembly factories.

Selle Royal produced in 2009 about 8 million saddles in Europe (number of employees in Italy stands at 280) as well as 5 million in Brazil. With Justek Selle Royal’ production level increases to about 25 million saddles annually.

The Northern Italy based saddle maker will continue the Justek brand name for Asia. Selle Royal states in a press release that the company will not relocate production from existing plants and this investment will have no effect on any production or personnel at any of the company’s locations. “The primary goal is to promote in the Chinese market and offer Asian customers the same high-quality product differentiation, service and development that Selle Royal has been offering in Europe, Brazil and the USA. This will be achieved by establishing Selle Royal’s decades of proven Italian manufacturing standards to these two Chinese factories.”

In connection to this take-over it is interesting that in 2006 Selle Royal was a strong supporter of the implementation of an anti-dumping duty for China made saddles imported into the EU. That 29.6% anti-dumping duty was imposed on 22 June 2007 and will run for a period of 5 years, up to 2012. However, there are exemptions for specific companies on these dumping duties. The companies Cionlli Bicycle (Taicang) Co. Ltd; Shunde Hongli Bicycle Parts Co. Ltd; Safe Strong Bicycle Parts Shenzhen Co. Ltd and the Cionlli Bicycle Components (Tainjin) Co. Ltd. enjoy a reduced duty of 5.8%, whereas Giching Bicycle parts (Shenzhen) Co. Ltd. and Velo Cycle Kunshan Co. Ltd. are completely exempted of anti-dumping duties.

The take-over agreement between Selle Royal SpA and Jiangyin Justek Vehicle Co. Ltd. was signed end of January by Massimo Losio, CEO of Selle Royal, and Mr Liu Jiangjun, General Manager of Jiangyin Justek Vehicle Co.

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