Accell Group Involved in Setting up Frame Facilities in Eastern Europe

APELDOORN, the Netherlands – Accell Group is currently involved in establishing frame production in Eastern Europe. Possible locations are the Ukraine and Hungary. The frame facilities will not be owned by Accell Group, but the holding company could assist in financing the start-up.

In an interview with Bike Europe Chief Operating Officer of Accell Group NV, Jeroen Snijders Blok explains in detail why Europe’s biggest in bikes is (partly) switching to frame sourcing in Europe. He also elaborates on Accell Group’s plans and actions to establish these production facilities. The interview will be published in Bike Europe’s April edition; publication date April 29. Here’s a preview.

On why Accell Group is involved in establishing frame production in Eastern Europe Snijders Blok says: “What it all boils down to is the fact that lead-times are on the rise. That is a fact we at Accell Group can not deal with. It is frustrating our business as there’s no time left to react on actual bike sales. When the selling season starts in Europe - beginning of April – we get accurate sales info on which models are popular and which not. We want to be able to order frames in April for bike production in July.”

On the current status of Accell Group’s plans to partly switch to sourcing frames in Eastern Europe, Snijders Blok says: “A possible location in Ukraine is selected. Plans are to set up a joint venture here with a partner Western European bike manufacturer. Next to the Ukraine we are also considering other countries in Eastern Europe. Like Hungary. We are looking at several options as we do not want to concentrate all frame sourcing at one supplier.”

On the ownership of the frame production facilities the Accell Group COO says: “We are not looking for setting-up joint ventures for a frame plant. Reason for that is that we do not want to be forced to shop for frames at a company we partly own. So, we do not want to take part financially in a frame facility in Eastern Europe.

“However, Accell Group could assist in financing the start-up of such a facility. As an example we could provide funds for the frame company to invest in machinery. The money involved could be a normal loan or returned to Accell in the form of lower unit prices for initial deliveries.

On the question: Are you looking for a partnership with one now in the Far East based frame manufacturer? Snijders Blok answers: “A number of frame makers from China and Taiwan contacted me on this. We are in discussion with them right now. But, as I said; we are not looking for joint ventures with them.”