Bicycle maker Giant Manufacturing Co (巨大機械) yesterday said it plans to spend 15 million euros (US$17.6 million) to build a new plant in northern Hungary to cement its position in the European market.
“The facility would become Giant’s second manufacturing base in Europe,” a company official said by telephone, adding that the firm expects sales to Europe to see double-digit percentage growth this year on the back of growing demand for electric models.
Giant said it chose Hungary as a base because of its favorable location and well-developed transportation network, which could help the company expand its sales channels in eastern Europe, chairwoman Bonnie Tu (杜綉珍) said in a statement.
Covering about 22 hectares, the plant in Gyongyos would be able to supply 300,000 bicycles per year after the first phase of construction is completed in the second half of next year, Giant said.
The facility would be built in three stages at a total cost of 48 million euros, it said.
The Hungary investment follows a company announcement earlier this week that it would spend 13.5 million euros to expand its plant in Lelystad, Netherlands, by building a logistics center there.
Europe last year accounted for 34.1 percent of the company’s total revenue, while Asia and the US contributed 27.9 percent and 21.14 percent respectively, Giant’s annual report showed.
The company has budgeted US$60 million for capital expenditure this year to fund the planned investment projects, it said.
However, the company gave a relatively conservative outlook for its China business this year, as demand for mid or high-priced models remains weak.
Despite the conservative forecast, the company said its aluminum component subsidiary plans to apply for A-share listing in China next year at the earliest. Kunshan Giant Light Alloy Technology Co (捷安特輕合金) has an annual capacity of 50,000 tonnes of aluminum components.
Giant posted revenue of NT$5.38 billion (US$176.16 million) in May, up 19.88 percent from the same month last year. Cumulative revenue in the first five months of this year rose 7.9 percent to NT$24.29 billion.
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