PBR International Head Office
264 East Boundary Road
East Bentleigh
Victoria 3165
Australia

Tel: +61 3 9575 2200
Fax: +61 3 9575 2345
Internet: http://www.pbr.com.au

PBR International USA Ltd.
140 Ellen Drive
Orion Township
MI 48359
USA

Tel: +1 248 340 1290
Fax: +1 248 377 4939

Russell Fynmore, Chairman of Pacifica Group
John R. MacKenzie, Managing Director of Pacifica Group
Derek Hodgson, President of PBR International USA

Headquartered in Australia, PBR International operates manufacturing facilities in Australia, Malaysia, Thailand and the USA, as well as a sales office in New Zealand and a technical centre in Detroit (USA). It also licenses its technologies to manufacturers in Japan and Korea.

PBR's customers include Bosch, Ford and General Motors. Around 60% of General Motors vehicles in North America are fitted with PBR brakes.

Corporate strategy

Pacifica Group is in the process of transforming itself from being a diversified manufacturer into a specialist automotive technology company. In 2001 the Group sold its remaining interest in its plastics business, and in October 2001 it announced plans to sell its Construction Products Division.

PBR has focused on increasing its international presence and around 65% of its automotive sales are now generated outside Australia. North America has been a particular focus for PBR's expansion in a bid to diversify its North American customer base.

Joint-ventures

• In May 2002 PBR and SKF agreed to jointly develop an electric version of PBR's Banksia parking brake. The alliance brings together SKF's expertise in automotive mechatronics with PBR's know-how in park-brake solutions. With parking brake-by-wire technology the driver will be able to actuate the parking brake using a switch in the car.
  
• In June 1999, Delphi exercised its right to acquire a 49% equity stake in PBR's Knoxville plant. PBR retained the remaining 51% stake in the facility. Demand for calipers from the new plant during its initial months of operation was greater than originally anticipated, leading to a rapid increase to full production and exceptionally strong sales.
  
• PBR has had a strategic alliance with brakes manufacturer Brembo SpA of Italy since 1998.

Investments

Following the success of the Knoxville plant that was opened in October 1998, PBR began construction of its second US production site in late 1999. In March 2001 PBR opened its Columbia, South Carolina (USA) plant. PBR employs around 200 people in the US$90m facility, which manufactures aluminium brake calipers and Banksia shoe park brakes.

To accommodate the increasing demand for aluminium castings for brake calipers, Pacifica installed a four-station carousel at its Melbourne casting plant in early 2000. The newly commissioned cell eliminates exposure to molten metal and repetitive materials handling, and deals with traditional safety issues and crush points. The cell also increased output from 900 to 1,900 units per day. The technology developed for this project is also being used in the Columbus (USA) plant.

Contracts

• In March 2001 Pacifica received orders to supply foundation brake systems to Toyota in Australia. The brake systems comprise front and rear calipers, disc rotors and Banksia parking brakes. The orders are valued at A$20m (US$10m, 31 March 2001) per annum at full production. The systems are manufactured at PBR's plant in East Bentleigh, Victoria (Australia) for installation on Toyota Camry and Avalon models.
  
• In September 2001 PBR secured a five-year contract to supply brake products, including aluminium calipers and park brake technology, to Bosch's Chassis Division in North America. The calipers will be produced at PBR's Columbia facility, which undergo a US$40m upgrade to accommodate the contract. The deal will increase PBR's presence in North America and increase its exposure to a variety of OEMs.
  

In March 2000 Pacifica launched a prototype of a totally new rear brake, which has already attracted attention from automotive manufacturers in North America, Japan and Korea. Designed and developed by PBR, the new brake is aimed at major international markets as a replacement for rear drum brakes. The brake, named the Auriga, offers a simple, effective and hard-wearing alternative to other replacement models. Through product design and innovative manufacturing processes, PBR has reduced the number of parts in the drum brake by half.

In 2001 Pacifica Group's sales increased by 4.6% to A$1.13bn (US$578.0m, 31 December 2001) compared with A$1.08bn (US$604.7m, 31 December 2000) in 2000. EBIT amounted to A$83.9m (US$42.9m, 31 December 2001) in 2001, 5.8% higher than A$79.3m (US$44.4m, 31 December 2000) in the previous year. The Group made a net loss of A$42.9m (US$21.9m, 31 December 2001) in 2001 compared with a net loss of A$5.49m (US$3.07m, 31 December 2000) a year earlier. This was attributed to a number of exceptional items totalling A$79m (US$40.4m, 31 December 2001) that were related to the restructuring of the Group's businesses.

In 2001 worldwide sales for PBR International increased 15.6% to A$882m (US$451.1m, 31 December 2001). EBIT amounted to A$71m (US$36.3m, 31 December 2001), 9.2% higher than in the previous year. This improvement in profits was attributed to PBR's North American operations. Total North American sales climbed 33% as a result of the start-up of production at the South Carolina plant and a year at full capacity at the Tennessee plant.