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LiuGong close to getting approval for R&D centre in TSSE under PLN 1bn capex programme


2012-08-17



China’s Guangxi LiuGong Machinery plans to invest PLN 1bn (approx. €245m) over the next five years in Huta Stalowa Wola (HSW), the maker of earth-moving equipment which it acquired from the Polish government in January in a PLN 280m (€69m) deal, Hou Yubo of LiuGong Machinery Poland told Puls Biznesu. The Chinese group is already in talks with the Industrial Development Agency (ARP) about a plan to build a research and development (R&D) centre in nearby Tarnobrzeg Special Economic Zone (TSSE) that would work on prototype machines for the European market, he revealed.

Marek Indyk, CEO of the Tarnobrzeg zone, confirmed that the procedure of awarding a permit for the R&D centre would begin shortly, adding that more details would be made public in late September. He did reveal, however, that LiuGong is planning a two-stage investment process, with the R&D centre to be followed by a second project on a site not yet part of the TSSE. Meanwhile, the Chinese group says it will place an offer for Zaklad Zespolow Napedowych, a power drive systems unit of HSW which it currently leases and which has recently been put up for sale by its administrator, with a starting price of PLN 80m (€19.6m). According to Mr. Yubo, LiuGong wants to buy the unit for a “reasonable price” and invest in its modernisation.

The global economic downturn has hurt demand for construction machinery, but at a meeting with union representatives earlier this month LiuGong said that while HSW would also be affected, the group stood by its investment plans for the Polish company and no job cuts were contemplated, Marian Kunysz, one of the union leaders at HSW, told the paper.



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