Peninsula Alloy of Ontario announced a joint venture with Dalian Xinzhong Group to commercialize its products in China. The venture includes $2.5 million in capital and $5 million in equity, which will help Peninsula scale up its business and expand its footprint in both Canada and China, generating potentially up to 60 new jobs in Canada.
Peninsula Alloy will be representing Dalian Xinzhong in North America for sales of higher volume and larger products which Peninsula is not able to manufacture. Peninsula Alloy is initially hiring two sales people to supplement our existing sales peoples’ efforts. Peninsula Alloy has also added an internal sales person to provide infrastructure for the increased sales activity.
The JV requires that Peninsula Alloy acquire additional warehousing facility to provide just in time deliveries to customers. Peninsula Alloy expect to be using the Niagara Foreign Trade Zone designation to establish a customs bonded warehouse with the CBSA. Dalian Xinzhong will be providing equity investment to expand the existing Peninsula Alloy warehousing capability.
"We are targeting North American sales of $20 million within three years on the Dalian Xinzhong products. This will require five more employees with warehousing, quality control and testing, and brokerage operations. Increasing the supply availability will enhance the existing Peninsula Alloy sales. We project that this should result in an additional $5 to $10 million in sales within 5 years, requiring about 30 additional foundry workers in our manufacturing operations."
- Peninsula Alloy Representative"We are also working on a technology transfer for a new alloy developed in Canada, which cannot be economically justified for sale if manufactured here. We have begun discussions on producing the new products in Dalian Xinzhong, with initial sales in China, followed by North American and worldwide sales. This would be expected to add 10 more engineering, sales, and warehousing positions to achieve a targeted $20 million within 5 years."
- Peninsula Alloy Representative
The final part of the Joint Venture is expecting to add an additional Dalian equity investment in Peninsula Alloy in the next 1 – 2 years.
The JV is expected to position Peninsula Alloy as a stronger player on the North American and International market scene, a situation that would be much more difficult without the participation of both parties. We continue to look forward to a strong, growing relationship in the future.