The Germany-based giant said it is to invest €17m (150m Yuan) in the facility in Chengdu, a major city in the western province of Sichuan. Construction is due to start on the 66,000 square metre site in 2014, with the first phase scheduled for completion within 12 months.
Friedbert Klefenz, president of Bosch Packaging Technology, revealed to FoodProductionDaily.com last month that the firm was actively seeking a new site on which to build a second factory to meet the 20% annual growth in demand for its machines.
Bosch confirmed today that the new plant would be twice the size of its other manufacturing base in the eastern city of Hangzhou and signals clear intent to expand its reach into the domestic market across the central and western regions of China.
The company said it had targeted the area as Chengdu is a regional hub for packaging machinery and the location is currently home to a major rival.
Bosch said it plans to use its new site as a springboard to significantly boost its Chinese sales which currently stand at €85m a year. Its plants in China primarily serve the regional packaging market which is growing on average by an estimated 15% per year, added the firm.
"Considering the enormous growth of the Chinese market we will use the new location in Chengdu to create additional capacities, as our existing facility in Hangzhou will reach its limit within the next two years", said Klefenz.
Chengdu production in 2012
While the new plant is not due to come on stream for a three further years, Bosch unveiled plans to start production in the area as early as next year.
The company said it had already leased a production hall and would begin manufacturing at the start of 2012.
Construction of the new plant (pictured left) would be launched two years later, with the first phase completed in 2015. At 7,200 square metres, the production area will occupy more than 50% of the building’s total 13,500 square metres. Some 300 workers will manufacture medium output packaging machines for the food, confectionery and pharmaceutical sectors.
The expansion means its total Chinese workforce will rise to 700.
"As China’s largest production centre of packaging machines is currently developed in Chengdu we have consciously chosen the location for our new production site as well", said Walter Häcki, general manager at the company’s Chinese production operations.
He added that both China's emerging market as well as the region's excellent infrastructure convinced Bosch to build its new production facility in Chengdu. The area also holds a large number of suppliers.
"The region also provides good technical colleges and universities which are essential for the recruitment of qualified staff in the future,” said Häcki.