SHANGHAI - MAN Diesel & Turbo SE (MDT), a subsidiary of the Germany-based MAN Group, formally opened the second phase of its production plant in Changzhou, Jiangsu province, on Wednesday to support expansion in China.

The new development will see the production area double to 20,000 square meters, and MDT plans to increase employee numbers from the current 250 to 400 by the end of 2012.

The total investment for the second phase development will be around 45 million euros ($64 million). MDT's annual turnover in China will increase some 200 million yuan ($31 million) once the new facility is fully operational.

The Changzhou plant will focus on business in six areas including the oil and gas sector, the production of turbochargers and after-sales services.

The plant is the one of seven manufacturing bases MDT owns around the world and is the company's first factory built outside Europe.

"We hope the new factory will strengthen our production efficiency and get us close to important customers. It will also help to reduce cycle time and shorten the reaction time to clients' requests," said Hans-O Jeske, chief executive officer of MDT SE.

As part of its expansion strategy, MDT will move its turbocharger manufacturing base from Shanghai to Changzhou in the coming months.

Turbochargers for large-bore diesel engines will be produced in Changzhou to supply the increasing demand in the Chinese market, as the production capacity of the Changzhou factory is expected to double during the next two years.

The premises will also provide technical support directly to clients around China.

Jeske has revealed that in the next five years, MDT may focus on developing the Changzhou factory to better utilize the facilities and resources in the factory.

"Our most important task in the coming five years is to develop this new factory. Of course, if the business development in China looks quite optimistic, we may have to review that decision," said Jeske.

The third phase of construction is still at the planning stage, according to MDT.

Jeske said China is one of the company's largest markets, and 12 percent of its 2010 sales revenue came from the Chinese market.

Meanwhile, about 42 percent of MDT's purchase orders intake came from China last year.

Having been in the Chinese market for more than 100 years, MDT has developed strong relationships with many ship manufacturing companies and heavy industries.

The company has also granted licenses to some 20 Chinese factories to produce diesel engines to its designs.

MAN Group generated some 630 million euros in Chinese market in 2010.

China Daily