Losberger to invest $2.5m in Shanghai expansion

Losberger GmbH, one of the world's biggest manufacturers of aluminium tents and modular structures, plans to invest additional $2.5 million in its Shanghai plant for business expansion.

"The current production capacity is unable to meet the growing demand in the Chinese market," said Chen Yibin, managing director of Losberger China.

The plant with a designed capacity of turning out annual 400,000 square meters of tents now has to produce 600,000 square meters. "But the market is still in great need of our products," Chen said.

E-commerce driving demand for warehouses

Chinese online shoppers least aware of privacy

Talking about the funds, he said $1.5 million will be used to buy facilities and the rest spent on expanding space. The expansion project will be completed this year to increase its annual output up to 1 million square meters.

Losberger tents have been used in China for more than 15 years. The company provides a series of mobile architecture solutions for manufacturing, e-commerce, retail and logistics parks and free trade zones designed to improve supply chain efficiency, enhance flexibility and reliability, and reduce cost, time and risk due to complicated logistics.

Management teams are seeking efficiency and flexibility of their supply chain to sharpen their competitive edge because the increasing competition and pressure to control costs are posing greater challenges on them, said Frank Gaenzle, general manager of Losberger China.

According to research data from a United States logistics information company, by leveraging the third party logistics across the entire supply chain, companies can reduce costs by 10 to 20 percent, creating a more competitive supply chain.

China's e-commerce sales reached 9.9 trillion yuan ($1.63 trillion) in 2013, up 21.3 percent from the previous year. "With business booming, e-commerce companies are facing a bottleneck of lagging supply chains, high logistics costs and the prospect of intensive investment requirements," said Gaenzle.

He said Losberger is able to provide e-commerce companies with flexible and light investment logistics solutions, adding that the use of modular storage enables them to expand storage in the peak seasons to meet the increased demand.

He said China is an emerging market with rapid growth of 50 percent per year, which is expected to reach 60 percent in the next five years.

Its Shanghai plant, one of Losberger's three global manufacturing bases with the other two located in Germany and France, will produce a large majority of its products for the Chinese market with only 10 to 15 percent sold to the markets in Oceania, Africa and Southeast Asia, said Chen.