Cables and cable systems provider Leoni has opened another production facility in Jining, China in an investment worth EUR23m (US$31.6m) to manufacture wiring systems.

"With this expansion of capacity we will have made sure of being able to fulfil all existing contracts," said Leoni board member in charge of the wiring systems division Uwe Lamann. "In addition, we are prepared for ongoing growth.

Leoni is benefiting in China from rising demand for established vehicle models, for which the company provides wiring systems, while it has also obtained several contracts for additional model ranges. Three projects, above all for General Motors, will ramp up in Jining until the end of this year.

The new facility has more than 25,000 square metres of production area and will employ around 1,600 people when series production commences. The number of employees is to rise to 3,000 in the medium term.

Leoni highlighted Jining's position between Shanghai, Beijing and the port city of Qingdao, to supply customers quickly.

Also within reach are the plants in Weihai and Penglai, which are currently still being operated via the joint venture with Daekyeung and will at the turn of the year be transferred fully to Leoni ownership.

Group-wide and including the joint venture plants, Leoni now has 11 facilities in China with a total of about 6,000 employees. In terms of consolidated sales, which in the current financial year will amount to about EUR350m, China is Leoni's third largest market after Germany and France. The company has been operating for 18 years with its own facilities in China.

To be able to satisfy heavy demand from the automotive industry for cable harnesses and wiring systems and especially to be able to supply for new vehicle models, Leoni added it was also setting up new production lines and expanding existing plants in other regions.

The wiring systems division alone currently has 12 capital investment projects, involving plans for two new facilities in Egypt as well as one each in the Ukraine and Russia. There will be additional production halls in Brazil, Mexico, Morocco, Tunisia and Serbia.

After the expansion is completed, the wiring systems division's network will comprise more than 30 production facilities.

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