Samsonite-Hungária, the Hungary offshoot of global luggage maker Samsonite International SA, is planning to switch its supply of plastic molded component parts from Asia to local processing companies in Europe.
Samsonite, with operational headquarters in Denver, said its Budapest-based subsidiary is investing in a 5.67 million euros ($6.7 million) project to upgrade and expand the operations of several Hungarian plastics injection molders.
Samsonite acknowledged opting for European supply could add to the cost, but said it will gain flexibility by having closer partners. It aims to boost each firm's capacity and competitiveness, helping Samsonite to establish a more stable and flexible local supply base.
Samsonite has relied on outsourcing much of its baggage production around the world. However, it invested heavily in recent years to expand in-house production of its rigid polypropylene and polycarbonate cases in Hungary.
Its latest project, funded partly by European Union and national government grants totaling 2.52 million euros ($2.9 million), will benefit four small to mid-sized injection molders located in Hungary's Transdanubia region in the south and center of the country.
The processors, already limited suppliers to the group, include Plasticor Kft. of Veszprém; Sárbogárd-based Sárrét-Plast Zrt.; Kresz & Fiedler Kft. of Pécsvárad and Termoplast Kft. in Pécs.
The financial injection will enable all four to lift their molding capacity significantly, implement IT developments and see two companies carry out building extensions. Work should be complete by this December.
Overall, the project aims to expand output of hard cover, injection molded suitcases while boosting the group's own competitiveness. Samsonite has quadrupled production at its complex in Szekszárd, southwestern Hungary over the past five years.