Issue link: https://read.dmtmag.com/i/65232
NUTS & BOLTS continued from page 29 LiuGong to Benefi t from Polish-Chinese Synergies Th e Chinese company has completed the takeover of Huta Stalowa Wola's civilian unit and is now eyeing export opportu- nities in nearby markets. It is rare that a foreign company enters the Polish market knowing its produc- tion costs will be higher than in its home market, but that is precisely the step which has been taken by Chinese construction equipment manufacturer Guangxi Liu- Gong Machinery. LiuGong, which recently completed the purchase of the civilian construction arm of Huta Stalowa Wola, a steel mill and manufactur- ing fi rm owned by the Polish state, hopes the takeover will give it improved access to major European markets, as well as an expert workforce and advanced methods of production. While the com- pany has declined to reveal the cost of the transaction, Polish media sources estimate it at zł.250-300 million. Why Poland? Th e HSW takeover gives LiuGong lower labor and China, the investment is a cost-up, "For us, coming from " said David Beaten- bough, chairman of the board of the new entity, LiuGong Machinery Poland, and vice president of Guangxi Liu- Gong Machinery. "A Chinese production base for equipment earmarked for European mar- kets, being so far away, would eat up any cost benefi ts we would have by being located in China, manufacturing costs than it would have had in many alternative European locations, while also providing it with a technological edge. "Th e company chose HSW and Poland primarily because of the quality of the Polish company's bulldozer range and production facili- ties, which gives LiuGong a ready-made production base for export purposes. Key for LiuGong is Poland's location on the doorstep of Western European markets, which the Chinese company hopes to tap. Th e fi rst excavators to begin rolling off the production line as early as May. In addition to its export ambitions, LiuGong Poland also expects to fi nd busi- ness opportunities in its adopted market. Poland is currently experiencing a road- building and infrastructure boom as it chases economic convergence, meaning con- tractors require construction LiuGong's TD-40E Dressta bulldozer can be used to help dispose of waste products from shale gas drilling. Courtesy of clear blue " said Beatenbough, add- ing that this was especially the case for larger equipment, such as excavators. company also holds the Polish engineers who worked for HSW in high regard. LiuGong plans to con- tinue production of bulldoz- ers at HSW's plant, using designs drawn by the Polish company, while also developing R&D activities and upgrading equipment in the future. Aside from bulldozers, the Polish plant also turns out larger machines involved in coal and gas mining. Liu- Gong is now installing a new excavator production line at the plant and expects the IDA UNIVERSAL May-June 2012 equipment machinery on a large scale. Th e company also sees potential for business from companies prospecting for shale gas in Poland, since it produces equipment needed to prepare the ground for drilling and for helping to treat waste products. Th e company's TD-40E Dressta bulldozer can be used in this capacity, leveling the ground and helping to dispose of contaminants. "You need to move a lot of earth to treat waste fl uids from shale gas drill- ing," said Mr Beatenbough. 16th April 2012 Nuts & Bolts continued on page 37 31