Fluoroware in joint Korea venture

Electronic News, March 3, 1997

Chaska, Minn.--Fluoroware entered into a joint venture, dubbed F.J.V. Korea Ltd., that will target the Korean semiconductor industry. Fluoroware and its joint venture partners, JeIl Chemical Co., Ltd. and Nippon Valqua Industries, will jointly manufacture material handling products in Korea.

To illustrate the soundness of such a venture, Fluoroware noted the analysis of Calvin Chang, analyst at San Jose, Calif.-based market research firm Dataquest: "The wafer fab equipment market in Korea was $3.1 billion in 1995, representing an impressive 84 percent growth in the year. At more than 60 percent of the Asia/Pacific market, Korea is unquestionably the most important market in the region."

Richard LaBute, Fluoroware's VP, Asia/Pacific operations, said the venture is part of Fluoroware's global manufacturing strategy. "To better serve our growing worldwide customer base, we are establishing direct manufacturing capability in key regions worldwide. This serves a dual purpose, namely reducing product leadtimes for our regional customers and boosting manufacturing capacity.

"The increasing prominence of semiconductor manufacturing in Korea warrants direct manufacturing in this region. By entering into a joint venture with these partners, we can leverage JeIl's existing manufacturing capability, as well as our already strong licensing relationship with Valqua."

Currently, Fluoroware manufactures its products for the Korean market in the U.S. and Japan, with sales to Korea accounting for $5-7 million annually the company said. Fluoroware will own 30 percent of the joint venture, with Valqua and JeIl owning 30 percent and 40 percent, respectively.

Fluoroware will manufacture wafer carriers of carbon fiber-filled polyetheretherketone (PEEK) and other materials, as well as additional material handling products for the semiconductor industry, at JeIl's 18,000-square-foot facility in Yongsan, Korea. Valqua will manufacture its PTFE and PFA-lined tanks at the facility.

Fluoroware selected JeIl, a manufacturer of PTFE gaskets and compression molded products for the chemical industry, due to its solid reputation for manufacturing quality products, including Valqua's licensed products. JeIl is also qualified by many of Fluoroware's major Korean customers.

JeIl was established in the 1960s and is 20 percent owned by Valqua. JeIl has annual revenues of approximately $30 million and currently manufactures Valqua's PTFE and PFA-lined tanks for Korean customers.

Valqua, Fluoroware's Japanese licensing partner since 1978, will have primary responsibility for manufacturing in the new Korean joint venture and will have staff on-site at the Korean facility. In August of last year, Fluoroware and Valqua further solidified their relationship by forming a joint venture in Japan to offer the semiconductor and microelectronics industries factory direct sales, marketing, technical support and service of the companies' material handling product lines.

More recently, Fluoroware announced a joint venture with First Engineering Plastic to manufacture products for the semiconductor, data storage and assembly, packaging and test markets in Singapore. European manufacturing is in Germany.