SGL’s purchase of its JV with BMW to impact carbon fiber production

The acclaimed Germany based carbon chemical firm, SGL Group, has scarcely made it to the headlines for having announced its decision of purchasing a stake in its JV with BMW. As per reports, this acquisition is intended at expanding carbon fiber production – a material that is rather pivotal in the automotive and transportation industry.Expert opinions point toward the fact that the deployment of carbon fiber, considered the most prominent material for fuel-efficient, light-weight vehicles, is proving to be a rather costly affair – a fact which may have caused a slight hindrance in the growth of carbon fiber market. Nonetheless, myriad automakers, state reports, have joined forces with specialist firms to bring about further advancements in carbon manufacturing, in a bid to manufacture lighter battery-powered cars that can drive for a longer range, and lighter fuel-powered cars that can consume lesser fuel. SGL’s acquisition, as per analysts, may have stemmed against this backdrop, and may influence carbon fiber market revenue to quite an extent.

According to latest reports, BMW aims to reduce its deployment of carbon fiber and has been turning toward using cheaper lightweight materials such as steel and aluminum, in order to maintain the high profit margins for its most profitable cars.

For the record, SGL’s joint venture with BMW is called SGL Automotive Carbon Fibers (ACF), and the SGL Group plans to acquire close to 49% stake of this company. Reports claim that this alliance would have no major impact on any of the current supply deals for the BMW i3, i8, and 7 series, though it may be likely that BMW’s presence in carbon fiber industry would be abridged by a bit percentage. Also, it has been stated that BMW would continue to hold onto its 18% stake in the German carbon chemical firm.

Post the acquisition of ACF, SGL’s sales in 2018 are expected to increase by average double-digit million euros, while analysts proclaim that the deal would also substantially consolidate the company’s presence in carbon fiber market.