A GKN forklift wheel.

GKN OffHighway, a UK-based manufacturer of wheels, axles and driveline systems for forklifts and other equipment, has expanded in China with a GBP9 million (USD17.7 million) acquisition.

GKN Plc bought Liuzhou Steel Rim Factory, in Liuzhou City, southern China, to create a presence for its off highway division and subsidiary, GKN Wheels, in the Chinese market, a GKN statement said.

The Liuzhou wheel manufacturer for the off-highway industry employs 550 people and produces wheels for forklifts, agricultural and construction equipment, harbour cranes and light vehicles. In 2005, sales revenue was GBP9 million (USD17.7 million).

GKN OffHighway will integrate the factory into its global operations and retain the existing workforce, the statement said.

GKN OffHighway CEO Martyn Vaughan claims the UK-headquartered company is the world's leading wheel manufacturer in Europe and the Americas for the agricultural and construction sector.

He said the acquisition created a significant market position for GKN in China.

"We intend to expand in this growing domestic market and develop Luizhou as a low-cost manufacturing centre to support our customers throughout Asia and beyond."

GKN OffHighway, part of GKN Plc, has operated in China for 18 years and employs 2,800 people across its driveline, sinter metals and off-highway operations. The group envisions its China workforce increasing to 6,000 in four years, making China the third largest employment group in the GKN group.

GKN Wheels, a part of GKN OffHighway, has plants in US, UK Denmark and Italy.

Separately, GKN plc has announced it is in discussions with Visteon Corp to explore an acquisition of assets and liabilities relating to Visteon's driveline business conducted at plants in Düren, Germany, Praszka, Poland, and Swansea, Wales. Driveline assets at Visteon's Arbor plant, Sao Paulo, Brazil, are also likely to be part of the deal.