Published On: Tue, Apr 26th, 2016

Engel invests £6m to expand Shanghai plant

Engel, the Austria-based injection moulding machine maker, said it would invest CNY60m (£6.4m) to expand capacity at its Shanghai factory, followed what it called continued growth in the higher end of the market in China.

The firm announced a doubling of capacity at the Shanghai plant four years ago, and said this latest investment would enlarge machining capacity and provide more office space and room for its training programmes.

Injection Moulding Machine

Engel invests £6m to expand Shanghai plant

“We have expansion plans in China because we are reaching again our limits, we will add another building to add more space for manufacturing,” said Gero Willmeroth, sales and service president at Engel Machinery Shanghai.

“In this one we will put another heavy duty machining centre for platen manufacturing.”

Willmeroth announced the expansion at the Chinaplas trade fair in Shanghai, which runs from April 25-28.

Construction had started and the new machining centre was scheduled to be finished by April 2017, he said.

Asia accounts for almost 25% of Engel’s €1.23bn (£958m) in total sales. By comparison, the company said that in 2012 its Asia business generated only €100m (£78m) in sales. China is Engel’s largest market in Asia.

The company has injection machine manufacturing plants in South Korea, which also doubled capacity in 2012, and at its new Wintec subsidiary in Changzhou, China, where it has started manufacturing less expensive, more standardised moulding machines aimed at the middle of China’s market.

Engel’s expansion comes amid some signs of softening in China’s market for plastics equipment.

The German trade group VDMA said that Germany’s exports of all types of plastics and rubber machinery to China fell 19% in 2015. Chinese industry figures show that overall market for plastics machinery in the country fell 6% last year, to CNY53.3bn (£5.7m).

But Willmeroth told reporters at Chinaplas that the upper end of the injection machine market fared better.

China’s overall economic growth rate slowed to about 6% a year, but he called that a “healthy development” for Engel because injection moulding companies are focused on smarter capital investment.

“This creates opportunities for companies like Engel, because when the development is slower, then people are more focused on productivity and efficiency and have to strengthen their competitive advantage,” he said.

“We see this in our sales figures,” Willmeroth said. “Not only the international investment, but also local companies in China and in the region invest in better-grade equipment to improve their competitive advantage.”

He also told reporters that while the company currently did not manufacture any of its robots or automation equipment in Asia, it was looking at that.

“We are thinking about manufacturing robots in Asia, maybe in China, but this will not happen overnight,” Willmeroth said. “But I’m sure in the mid-term this will definitely happen.”

He said Engel last year established an automation technical centre in Shanghai with engineers to provide more support to customers looking to beef up their use of robots.

At Chinaplas, Engel said it would exhibit several machines to showcase production control and efficiency, and the Wintec subsidiary unveiled a new line of budget all-electric machines, its e-win series.

Wintec president Peter Auinger said the unit, which opened its first, relatively small factory in Changzhou in 2014, was likely to double its manufacturing capacity in the next three to five years.

The company said 85% of its Asia production was sold within the region.