Varroc’s lighting division lost money in 2021, largely because of underutilized production capacity, Plastic Omnium CEO Laurent Favre said, adding that utilization rates are about 50 percent. Sales were about 800 million euros in 2021, he said.
Favre said Plastic Omnium hopes to bring Varroc’s lighting activities to a “double digit” EBITDA in two to three years, through better capacity utilization, improved operations and working capital management, and synergies with other units such as front-end modules.
“We’re very confident we can gain market share and develop the business in coming years,” Favre said in an online news conference. He said that Varroc was a leader in lighting for electric vehicles, supplying models such as the Volkswagen ID4, the Renault Megane E-Tech, the Rivian RT1 pickup and the Ford Mach-E. VW Group is Varroc’s biggest customer, followed by Ford Motor.
The addition of Varroc will complete Plastic Omnium’s lighting offer, he said. The Indian supplier specializes in headlights, tail lights and turn signals, while Osram’s lighting activities center on interior lights and light sources such as LED modules.
“It makes a lot of sense to bundle the two activities into one division,” he said. Plastic Omnium’s other business units include bumpers and tailgates, front-end modules, exteriors and powertrain [including fuel tanks and hydrogen fuel cells].