Polish industrial group Boryszew has confirmed it will construct a new production plant in Russia to manufacture technical components for the automotive sector.
The group, which grew rapidly last year after several strategic acquisitions, plans to invest €20m over two years in its new facility. The plant is due to start up in February or March next year, according to Boryszew chief executive Piotr Szeliga.
He told a news conference, called to announce the firm’s 2012 half year results, that Boryszew will reach a decision on the plant’s exact location by early October.
“I think that, at the beginning, the plant will produce injection moulded components,” the CEO was quoted as saying.
Szeliga revealed that his company has guaranteed supply contracts from Volkswagen in Russia which currently amount to €20m per year. VW opened an assembly plant in Kaluga, 170 kms south west of Moscow in 2007 which last year turned out 125,000 vehicles
Europe’s top car manufacturer is committed to investing €1bn expanding its capacity in Russia up to 2018. It is already investing €550m auto parts production in Russia and China in preparation for future growth in their respective markets.
In 2011, Boryszew’s German offshoot plastic car parts moulder Altmärker Kunststoff-Technik GmbH. (AKT) was negotiating a new supply contract with VW and was carrying out a feasibility study on the construction of a Russian plant.
At the same time, the Polish group’s auto tubing products maker Maflow was reported to be in talks on future supply with Renault in Russia.
Boryszew acquired insolvent company AKT, based in Gardelegen, Germany, in August 2011 for €6.7m. The subsidiary moulder also has a plant in the Czech Republic. The Polish buyer took over the assets of the insolvent Italian firm Maflow in 2010.
Boryszew also announced that its polymers and fibres subsidiary Elana will begin producing plastics regrind in the second quarter of next year providing material to its expanded injection moulding operations.
The Polish group, which is publicly quoted on the Warsaw Stock Exchange, reported first half sales up more than 22% at €596m, but its operating profit was down on the first half year of 2011 by 16% at €28.3m. Poorer earnings reflect the difficult market environment, it said.
In July, the Boryszew CEO made clear that his company is focusing on “optimising the existing (company) structures” but it is not ruling out further acquisitions, although this is not currently a priority.