VIENNA, Austria—Semperit A.G. plans to invest about $15.9 million to further boost hose capacity at the company's Semperflex Optimit hose plant in Odry, Czech Republic.
Included in the latest expansion is a new industrial hose production process, which the company said will be even more efficient and of superior quality because of the addition of state-of-the-art robot technology.
It's the second major expansion launched at the factory in the last 15 months. In late January 2014, the company began investing more than $13.6 million to boost capacity and add a new plant at the site, which the firm claimed is now the largest producer of hydraulic and industrial hose complex in Europe.
That project, aimed at increasing capacity by 30 percent, was finalized recently. The new factory opened April 2.
Once the second expansion project is complete next year, industrial hose production at the facility will increase by about 40 percent by the second quarter of 2016, a company spokeswoman said.
Additional capacity is needed because “we succeeded in significantly increasing sales volumes in recent years and gained additional market share in spite of the weak economy,” according to Thomas Fahnemann, CEO of Semperit A.G. Holding.
He said the hydraulic hose capacity expansion initiated in 2015 already is booked with customer orders. “We are further expanding production in Odry in order to continue on our growth path and satisfy the strong demand for industrial hoses.”
Capacity for mandrel-built industrial hoses primarily used in the construction, oil and transport industries will be increased by more than half, the Vienna-based firm said. Production capacity for extruded long length industrial hose for the welding, mechanical engineering and other markets will be boosted by about a third by year-end or early 2016.
Hose produced at the factory in Odry is not only earmarked for the Czech Republic but also for the European sector, the spokeswoman said. About 90 percent of hose made at the factory is exported, with some of it aimed at the global market.
Semperit has been investing heavily in its businesses during the last two years. It has earmarked almost $71 million for capital expenditures in 2015, up from about $70 million last year. About $47 million will be used for growth investments.
Against a backdrop of the current challenging business environment, especially in Europe, medium- to long-term demand for hose is expected to be positive, according to Fahnemann. Demand will be driven by long-term global growth in the mechanical engineering and construction industries along with mining, he said.
He noted that, in particular, emerging markets are catching up with developed countries, and infrastructure expansion will ensure there will be ongoing demand for hydraulic and industrial hoses, especially in the construction and agricultural machinery markets.