HANOVER, Germany—ContiTech Fluid Automotive Hungaria has expanded its Vac, Hungary, manufacturing facility, significantly boosting the site's capacity in the process.
The operation more than tripled the size of the Vac plant from 11,800 square feet to more than 35,000 square feet and added new lines to produce products for the heating and cooling market.
The factory's work force will grow by 10 percent to 671. ContiTech Fluid Automotive is part of the ContiTech Fluid Technology group, which is a business unit of ContiTech A.G.
"The facility produces complete fuel lines for the automotive industry," a spokesman said. "These are lines for heating and cooling and for fuel supply and exhaust gas management."
By summer, the Vac site will be the production center for all fuel lines destined for the European market, according to Petra Beckman, who heads Fuel Supply & Exhaust Gas Management, one of nine segments within ContiTech Fluid Technology.
Growing product range
While it did not give a specific figure on the cost of the expansion, ContiTech said the addition was part of a growth project that called for an investment of about $6.5 million.
Included in the project were a new warehouse and a highly automated machining center for steel tubes used for fuel lines, the spokesman said. "Both have been built and are operational," he said.
With the expansion of the firm's product range, ContiTech can tap into new markets, said Mihaly Nagy, managing director of ContiTech Fluid Automotive.
ContiTech and its parent, Continental A.G, are forging a stronger collaboration with the Hungarian government to enhance product innovations, training and supplier development, ContiTech said.
Among other things, Continental will work closer with Hungarian training and research facilities, which will play a bigger role in product development. The company will create new jobs and provide employees with the training needed to improve their chances in the labor market, the firm said.
In addition, Continental said it plans to increase the use of Hungarian suppliers.
Biannual meetings under the direction of the Hungarian Ministry for National Economy are a key element of the pact, ContiTech said. Continental, ContiTech and government officials will discuss upcoming projects and seek ways to support each other.
"The relationship between our company and the Hungarian government developed very positively in the past," according to Heinz-Gerhard Wente, a member of the Continental executive board and head of the ContiTech division. "The contract supports our plans for future growth and strengthens our continued involvement with the Hungarian government."
Earnings, sales up
ContiTech, one of five divisions of Continental, is coming off a strong year and looking for additional growth in 2013.
ConiTech grew nearly 4 percent during the past fiscal year, generating $4.1 billion in sales, according to the firm.
Earnings before interest and taxes rose to $577 million from $544 million in fiscal 2011.
Wente said ContiTech's focus on growth in Asia, Brazil and Eastern Europe were primary reasons for the improvement. The company invested $197 million in its operations last year, a record high, and $52 million more than the firm invested in 2011, he said.
Asia accounts for 16 percent of ContiTech's overall sales, an increase of 3 percent, while the U.S. comprises 17 percent of sales, an increase of 4 percent, buoyed by the company's 2012 acquisition of a Parker Hannifin Corp. automotive air conditioning business, based in Tennessee.
Sales in Western Europe remain the firm's strongest, making up 56 percent of its sales.
ContiTech has added 960 employees over the last year, increasing its work force to 28,210.
The company recently opened a research and development center in China, and it is moving forward with construction of an air conditioning and power steering plant in Kaluga, Russia. ContiTech also purchased a hose factory in Turkey and is setting up a service center in Dubai.