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From Site Selection magazine, September 2012

Spin Control

Components of rotor spinning machinery are staged for assembly at Rieter’s new plant in Changzhou, China.

ome of the world’s leading names in textile machinery manufacturing are developing massive factories in China.

Winterthur, Switzerland-based Rieter Group, one of the world’s leading spinning machinery builders, recently inaugurated the first part of its new production plant in Changzhou, Jiangsu province. In the 1990s Rieter established a presence in China with a joint-venture assembly plant and in 2000 opened its own production plant in Changzhou.

Completion of the second Changzhou plant is scheduled for the end of 2013. Rieter says the new plant will enable it to better meet customer needs in China.

Rieter operates 18 manufacturing locations in nine countries and employs a global work force of about 4,700, 28 percent of whom are based in Switzerland. Earlier this year, the company consolidated all of its Switzerland manufacturing into its Winterthur site.

Another Swiss multinational firm specializing in textile machinery is Pfaffikon-based Oerlikon, which recently consolidated its eight offices in Shanghai into one facility. The Shanghai operation will be the global headquarters for Oerlikon Textile, the largest segment of the company’s business.

“China has become Oerlikon’s most important market,” said Michael Buscher, Oerlikon’s global CEO. “The opening of our new Chinese headquarters marks another milestone in the group’s successful expansion strategy in Asia and is designed to spur further growth in the country.”

Fong’s Industries Group, which has two divisions specializing in dyeing and finishing machinery, is building a huge factory in the Zhongshan Torch Hi-tech Industrial Development Zone in Linhai Industrial Park. The company has released few details about the project, but describes it as “the textile machinery factory of the future.”

Logistics Center Supports DAF Growth

DAF Trucks is building a new distribution center in the Netherlands.

AF Trucks, a subsidiary of PACCAR, is building a €30-million (US$37-million) parts distribution center in Eindhoven, the Netherlands, to distribute aftermarket truck parts. The company anticipates completing the 26,000-sq. m. (280,000-sq.-ft.) facility during the first half of 2013.

“The new distribution center replaces the existing Eindhoven distribution center and provides additional capacity and operating efficiency to support DAF’s growth,” said Harrie Schippers, DAF Trucks president. The new center will utilize technology such as advanced logistics systems, radio-frequency identification, smart tags and computer-generated voice picking.

DAF also operates parts distribution centers in Madrid, Budapest, Moscow and Leyland, England.
A recent benchmark study by the Holland International Distribution Council determined that the Netherlands remains an attractive location for long-term logistics operations while facing fierce competition from neighboring Belgium, France and Germany. The report cited factors including the country’s relatively efficient property and closing costs, a corporate tax of 25 percent (and an effective tax rate that may be far lower) and flexible temporary labor regulations in the Netherlands.

Coffee Culture

Portioned coffee is big business for Nespresso, which plans a third production center in Switzerland.                               

he growing popularity of Nestlé’s Nespresso products has spurred the company to build its third production center in Romont in the Swiss canton of Fribourg.

“Some 25 years after creating the portioned coffee segment, the third Nespresso Production Center will provide the capacity needed to sustain growth in Europe and develop our brand globally,” said Patrice Bula, executive vice president, Nestlé SA, and chairman of Nespresso.

Nespresso said it has worked closely with Fribourg and Romont officials to finalize the location of the facility at Romont. The company expects construction to begin by the end of 2012, and the center will be operational during the first half of 2015. Nespresso plans to invest CHF 300 million (US$309 million) and create more than 400 jobs with the facility.

The site in the industrial area “En Raboud” is located in one of the seven important cantonal strategic activity areas, near the Berne-Fribourg-Lausanne rail line. It builds on the canton’s emerging “food tech” sector. Nespresso said it looked at numerous options before deciding to build in Switzerland.

“Nespresso is a company born in Switzerland, which is today the global reference for exceptional quality in portioned coffee,” Bula said. “The decision to invest in the town of Romont is based primarily on Swiss excellence and the proximity to existing Nespresso teams in the country. Moreover, Romont offers a number of objective criteria of a central site in terms of logistics, strong infrastructures and solid professionalism of a skilled work force.”

Planting Season for Tire Plants

Swedish firm Trelleborg sees great potential in China’s agricultural tire market.

he Trelleborg Group, based in its namesake city in Sweden, has opened a new factory in Xingtai, Hebei, China, to manufacture high-performance agricultural tires. The new investment is part of the company’s long-term strategy to grow in markets with strong potential. The site produces both radial and bias technology tires for farming, forestry and agro-industrial applications. The plant employs about 200, a figure that will grow to more than 350 by 2015.

“We believe that China has highly favorable long-term growth opportunities and our strong global platform will be further reinforced by this facility,” says Peter Nilsson, Trelleborg’s president and CEO. “This new production unit continues our commitment to the agricultural sector in China. The manufacturing facility will also strengthen Trelleborg’s competitiveness in markets other than the Chinese, by broadening the range and through more efficient production.”

Trelleborg officials say there is tremendous potential for tire sales in the agricultural sector in China.

“Today, more than half of farming operations in the country are conducted manually and industry mechanization is taking place rapidly,” says Maurizio Vischi, business area president, Trelleborg Wheel Systems. “The demand for high-performance agricultural tires is favorable. Through this establishment, Trelleborg becomes the first global manufacturer of agricultural tires to have its own production in China. The facility provides proximity to Chinese customers, but also support to European and U.S. customers in the local Chinese market.”

Trelleborg has approximately 1,500 employees in China, and operates several manufacturing facilities there, located in Huizhou, Shanghai, Wuxi, Qingdao and Xingtai.

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