26 May 2017

Polish Bearings – Chinese Capital

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Before politicians and economists started to openly and plainly talk about the New Silk Road, the inhabitants of Kraśnik had built the first stop on its route and benefitted from it.

Recent years has probably been the best period in the nearly 80-year history of Polish Bearings Factory (Fabryka Łożysk Tocznych, FŁP) in Kraśnik. Not long ago this company was on the verge of bankruptcy, and now it is out of the woods and it is dynamically developing thanks to the support of Tri-Ring Group of China.

The new owner’s sizeable investments in the state-of-the art machine facilities combined with the Research and Development Centre built also with the support of EU funding, allow FŁT to compete with the leading bearing manufacturers and meet growing expectations of customers.

Difficult Times

Grzegorz Jasiński, the President of Polish Bearings Factory (FŁT) – Kraśnik S.A., the native resident of the town of Kraśnik, recalls that when he took the position in 2009, the situation was not so favourable. The manufacturing plant in Kraśnik – at that time still a state-owned enterprise – could not keep up with the competition.

This situation combined with the crisis in the automotive industry translated to a difficult situation of the factory. The number of orders decreased by half and caused downtimes. As a result, the oldest bearing manufacturer in Poland faced the threat of bankruptcy.

— When I took up the position of the President, I became responsible for the future of the company and its 2000 employees — says Grzegorz Jasiński, who remembers his first weeks in FŁT vividly. He was seeking a way out of the difficult situation, he talked with employees, he persuaded them that restructuring is the necessity.

He managed to convince trade unions to agree to cooperate in order to save the company. In 2010 the Polish Industrial Development Agency (IDA) joined the mission of rescuing one of the biggest European bearing manufacturers by granting a loan and capitalising the factory.

Necessary Impulse

The worst was over, but I knew that FŁT has a greater potential — recalls Jasiński, who already considered cooperation with an international investor. When IDA decided to sell the company, he knew that the best investor would be the company representing the industry which understands the specific nature of production and will explore possibilities for development.

In 2010, at a joint business meeting organised by the customer, he met representatives of Tri-Ring Group, and he was perfectly aware that the company from Asia is a very serious player in its industry.

After visiting modern plants of Tri-Ring Group built on a spectacular scale, the management of the Polish Industrial Development Agency and representatives of the factory in Kraśnik confirmed that cooperation with such business partner might unlock the potential of the manufacturing plant in Kraśnik.

In 2013 Tri-Ring Group – the leader of industrial and automotive industry in China, listed in the ranking of 500 biggest companies in that country, employing more than 30 thousand people – bought the majority of shares of FŁT. It was the first investment of Tri-Ring Group in the manufacturing plant in Europe, but it was also one of the first major Chinese investments in Poland and it was perceived as a model one.

— We have invested more than PLN 80m in the Polish factory since the acquisition, and by 2019 we plan to invest another PLN 70 m. Executives of Tri-Ring Group are satisfied with their investment in Poland. The factory has an enormous potential, and parts made in Kraśnik complement the offer of the entire Group — says Weiren Zhao, Member of the Management Board of the factory and General Manager of Tri-Ring International (Poland).

He also highlights that from the beginning the stress was put on the modernisation of machine facilities of FŁT – old machinery was replaced and missing machines were bought. — Our facilities must simply be the best, and our products – world-class — summarizes Zhao.

Thus, at the moment the factory is equipped with machine facilities of leading manufactures with each machine worth couple hundreds of euros. He also highlights that apart from new machinery the plant has opened up to a wide range of possibilities being the result of relations within the international network of Tri-Ring Group.

Using excellent Polish Zhao with a smile on his face recalls the first concerns of inhabitants of Kraśnik and factory workers that upon the acquisition of the plant, the Chinese will bring several thousands of their own workers and make the Poles redundant.

Meanwhile, Weiren Zhao is the only Chinese in FŁT.It was said that the factory in Kraśnik would produce Chinese bearings, and meanwhile the plant manufactures bearings of Polish design and production.

The portfolio of FŁT is systematically expanded. It is remarkable at the present juncture, as new solutions are developed on a day-to-day basis and buyers may choose from a wide variety of suppliers from various parts of the world.

Added Value

— Business partners do not expect us to be the manufacturer offering custom made finished goods any longer. They want us to apply our expertise and experience and propose, design and test new solutions. We are to become their partner — says President Jasiński.

At the same time he ensures, that “tailor-made products” are their specialty, and that Kraśnik engineers have already started working on projects to be implemented in 2024. The company has its own laboratory and builds a new Research and Development Centre to develop new solutions, it also cooperates with the best technical universities in Poland.

Grzegorz Jasiński adds that thanks to the machinery and capabilities of experts employed in Kraśnik – starting with assembly line workers through controllers to designers – the company is fit to meet expectations of the most demanding customers.

— We aim to cooperate with business partners using our products in the phase of the so-called first assembly. In our industry it is the token of prestige and trust — explains Grzegorz Jasiński.

The President of FŁT highlights that bearings made in Kraśnik are used in automotive assembly lines of the best German, Italian and French car manufacturers. They include both bearings, which may be easily replaced, such as runner bearings, and those used for many years such as drivetrain or automatic transmission bearings.

Automotive industry is the apple of the eye of company’s employees — as it is the source of 70 per cent of all orders. Industry workers and automotive enthusiasts know that it is a rapidly changing sector – on a day-to-day basis the industry witnesses a technological innovation and change of customers’ expectations.

Bearings are to be more silent, more resilient and lighter. Not only the expectations towards products themselves evolve, but also towards the role of the manufacturer.

President Jasiński and General Manager Zhao cordially agree that their cooperation is very good. Jasiński highlights that people should not fear Chinese investments – for FŁT the Chinese signify the capital and state-of-the-art solutions. Zhao points out the advantages of Poles – they are hard-working, inventive, trustworthy and flexible. You should bear in mind that Tri-Ring Group is not the only Group still seeking partners in Europe.

COMMENTARY

MONIKA MAKSYMCZAK

Corporate Banking Manager, HSBC Bank Polska S.A.

Ideal Match of Competencies

Polish Bearings Factory (FŁT) in Kraśnik is a model example of a successful Chinese investment in Poland, proving that the investor’s expertise in the industry and the ability to identify the company’s potential turned a company threatened with a bankruptcy into a buoyant enterprise. It is also an example of a simply perfect match of competencies, which created a synergy effect.

The Chinese investment allows FŁT to overcome obstacles and strengthen its international renown (70 per cent of FŁT’s production is exported to foreign markets, among others to Germany, Italy, Austria, the US and Mexico, and its recipients are well-known car manufacturers).

In recent years, the modernisation of machine facilities took place, the production capabilities have increased and the quality of bearings has improved. Next investments are planned to allow the company to further expansion. Research and development will also constitute a significant growth factor.

FŁT has already have its own design office, laboratories and department of machines and specialised equipment, it also cooperates with three universities of technology: Rzeszów University of Technology, Kielce University of Technology and Warsaw University of Technology. And it is not the end of the line for the factory.

In cooperation with Tri-Ring International Poland, it started working on setting a Research and Development Centre up in the plant. The purpose of this Centre is to develop innovative designs of bearings ordered by existing and new customers.

These innovations will also result in lowering the carbon dioxide emission in the production process. The challenges ahead for the FŁT in Kraśnik are the expansion towards new use of bearings and closer cooperation with its customers. These actions result in further development and success of the company and strengthening the position of entire Tri-Ring Group in international markets.

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