Figeac Aéro Group of France and China's Shandong Nanshan Aluminium Co. Ltd have announced the signature of an agreement to define the framework for the creation of a Joint Venture in China, to design and produce aluminium parts for a wide range of aerospace applications.

Figeac Aéro is a specialist in the production of light alloy and hard metal structural parts, engine parts, landing gear parts and sub-assemblies. Shandong Nanshan Aluminium Co. Ltd is a leading aluminium producer.

The agreement represents a decisive step for Figeac Aéro, who will become the first French subcontractor to locate to the fast-growing Chinese market.

The two partners have decided to work together through a Joint Venture, with capital of $20m financed from equity, with the new joint company being co-owned on a 50-50 basis. Its aim is to produce medium-to large-sized machined aluminium parts for the aeronautical and aerospace industry.

Shandong Nanshan Aluminium Co. Ltd will provide the raw materials for this new entity, and Figeac Aéro will supply its globally recognised machining expertise. The two companies also plan to pool their partner networks throughout China in order to accelerate the development of this new shared entity, and thus capture offset as well as domestic market share.

The agreement enables Figeac Aéro to locate to Asian markets at competitive costs, promote its expertise in machining and be in a position to capture potential growth in this market.