QINGDAO, China—ContiTech A.G. has launched construction of a hose plant in Qingdao to boost capacity and bolster the company's base in the region.
It broke ground on phase one of the project Nov. 1.
Expected to span about 161,458 square feet once the first part of the project is complete, the factory will have initial capacity to produce approximately 15 million low pressure hoses annually, a company spokeswoman said.
Cost of the first phase was estimated at more than $22 million.
Depending on the way the market develops, the firm said it plans to expand the facility further over a five-year stretch and complete all phases in 2020, although it did not say how many phases could be involved. Other details about possible future expansions also were not released.
ContiTech's newest plant is its second in Qingdao, the spokeswoman said. In the next few years existing production of heating and cooling hose lines will be moved from its present plant to the new factory, which is located only a few kilometers from the current building.
About 500 employees presently work at the site, the spokeswoman said, and they too will move to the new factory.
The current facility has limited space, she said, which is the reason the company, a division of Continental A.G., decided to build a bigger structure and consolidate the two operations.
When ContiTech signed a memorandum of understanding on the new factory in July, Hans-Jurgen Duen-sing, CEO of the firm and a member of the Continental executive board, said the facility is needed to more effectively meet its customers' needs and requirements.
“That's why we consequently follow our strategic approach to further localize our global operations,” he said at the time.
ContiTech produces rubber hose and hose assemblies for the automotive industry at the Qingdao facility, “mainly for the domestic car manufacturers in China and the Asia-Pacific region,” she said. It will continue to do so at the new plant.
Its newest hose operation in Qingdao is ContiTech's fourth mobile fluid applications plant in China.