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Engel to open second plant in China

By: Bill Bregar By: Nina Ying Sun By: Steve Toloken

March 27, 2014

Engel Holding GmbH, the Austria-based maker of injection molding machines and robots, will open a second plant in China — an operation in Changzhou to make injection presses, auxiliary equipment and drive systems, according to Chinese government and press reports.

Government reports from China say the factory will be able to make 300 presses a year and  generate sales of more than 500 million yuan ($80 million).

Gerd Liebig, Engel’s marketing director, confirmed that Engel is opening the factory, when contacted March 27. He declined to give details, saying that Engel plans to make a formal announcement in the next few days.

Engel also will spell out its plans at a news conference at Chinaplas, scheduled for April 23-26 in Shanghai, Liebig said.

Gero Willmeroth, president of sales and service at Engel’s Shanghai operation, also confirmed the news. “I can confirm that we are building something there, and we will be giving details at Chinaplas,” he said.

Engel officials declined to give details, but said the plant will build injection presses, among other products.

According to the website of the local government, the Wujin district of Changzhou city, Engel started construction last fall on the first phase, a 215,000-square-foot building. The government said the investment is 270 million yuan, or $43.4 million.

Engel has posted help wanted ads in China for the new plant at Changzhou, in Jiangsu province. The total land area measures about 20 acres.

Engel apparently has already moved management around to gear up for the new production. In late January, Engel announced that Peter Auinger was moving from his post as managing director of Engel de Mexico SA de CV to fill a new role with Engel in Asia. The new head of Engel Mexico is Héctor Moreno, whom Engel recruited from KraussMaffei Group’s Mexican subsidiary.

An industry source said Auinger is heading the new Engel factory in Changzhou.

The project made the local TV news in China. A report from October showed a backhoe preparing ground and crews beginning foundation work. That TV report said construction was scheduled to finish this May.

Engel has been manufacturing injection molding presses in Asia for 13 years. Engel began assembling small- and medium-tonnage presses in Pyungtaek, South Korea, in 2001. That factory turns out presses with clamping forces under 400 metric tons.

In 2007 Engel opened its plant in Shanghai, to build larger-tonnage machines of 400-4,000 metric tons.

Engel, based in Schwertberg, Austria, has expanded both Asian factories to meet growing demand. Engel has invested 20 million euros ($27.5 million) in sizable expansions of its two factories in the Shanghai and South Korea, in the last few years.

Last year, Engel reported that, for the first time ever, sales in Asia topped sales in the Americas, for the 2012-13 fiscal year. Engel financial reporting defines Asia as including China, Southeast Asia, South Korea, India and Australia.

Speaking before last year’s Chinaplas, Engel officials said Asia will account for 20 percent of Engel sales in 2015.

Engel’s new investment in Changzhou comes as the Chinese market for molding machines is shifting towards more high-performance machines to deal with rising labor and energy costs, and measured by number of machines sold annually, is actually shrinking.

At Chinaplas 2013, Engel projected that China’s injection press market would gradually decrease from 45,000 machines a year in 2012 to 35,000 by 2020. But company officials said the higher-end market more suited to automation would grow.

‘‘You see China going down in numbers, but the higher segment is growing, that’s why we are still growing in China,’’ Willmeroth said at the time.

Stephen Downer, Plastics News correspondent in Mexico City, contributed to this report.