DGAP-News

SHW AG: Strategy 'SHW 2020': Returning to the path of profitable growth - Seite 3

through the planned construction of a new production site in Eastern
Europe. The establishment of this site will be accompanied by the transfer
of selected pump projects and levels of the value chain. During the first
half of 2016, the Company will evaluate potential locations and build the
necessary infrastructure. The first processing and assembly lines are
expected to be constructed during the second half of the year. Start of
production is scheduled to begin in the course of 201. With expected sales
of above EUR 100 million, the resulting earnings improvement is estimated
to be in a high single-digit million range until 2020.

Expanding presence in all strategic markets

Today, SHW is already present in all strategically relevant regions so that
it can meet the growing demand of customers located in Europe, NAFTA, China
and Brazil. As part of its current strategy, SHW is forging ahead with the
targeted international expansion of its Pumps and Engine Components
business segment. The Chinese subsidiary, SHW Automotive Pumps (Kunshan)
Co., Ltd, will begin with the manufacturing of already existing pump
assembly projects at the Kunshan location. The production of transmission
oil pumps for a leading Chinese automotive manufacturer is scheduled to be
carried out by this subsidiary in 2017. In 2018, the Company will begin
with the series production of variable engine oil pumps for a global engine
platform in North America and Europe for a major North American automobile
manufacturer. Series production for this product will begin the following
year in China. The internationalisation strategy will have an increasing
impact on the sales figures of the Pumps and Engine Components business
segment as of 2018.

The Chinese joint venture SHW Longji Brake Discs (LongKou) Co., Ltd.,
within the Brake Discs business segment, has been operating since 1 April
2015. Initially, the joint venture will produce unprocessed brake discs for
the Chinese partner's spare parts business. The joint venture's focus in
the future will be on the development and production of processed monobloc
ventilated brake discs for passenger cars and light commercial vehicles
mainly for multinational manufacturers in the Asian market. A variety of
options are being explored for the Brake Discs business segment's market
entry into North America.

Strengthening technological and innovative leadership

SHW will extend its technological and innovative leadership. The Company
already has a leading position in the areas of and CO2- and weight-reducing
engine oil pumps and composite brake discs. In view of the rising demand