Accell Moves to Hungary

HEERENVEEN, Netherlands (May 18) - Accell Group NV is moving part of its production at Hercules in Germany to a new production facility in Hungary. The new factory, for which Accell Group entered into a joint venture with Schwinn Csepel is expected to be operational as of January 2002. Accell Group NV, the holding company of Batavus, Be-One, Hercules, Koga-Miyata, Sparta, Mercier, Lapierre and Lookie/Cool invests EUR 4 million in the new production facility. The third largest bicycle group in Europe (total production about 750,000 bicycles) states in a press release dated May 17 that the investment is made together with the Hungarian bicycle manufacturer Schwinn Csepel with whom Accell Group has been working for years. Schwinn Csepel will own 26% of the shares in the new factory and will take care of the daily local management. Accell Group will be responsible for the funding, the technology and general management. Accell's Hungarian factory will start with a production capacity of about 150,000 bicycles and will provide employment for 100 people. With the new factory Accell is reducing the assembly of bicycles at Hercules in Germany. At this moment Hercules is producing about 125,000 bikes annually which will be reduced to about 25,000 units. The reorganization of Hercules means about 80 of the 130 jobs at the German bike maker will be lost. According to Accell's President René Takens, the move to Hungary is partly caused by the present poor situation of the German market. "Spring sales are down which puts an even higher need to reduce our fixed costs at Hercules. In addition to that we were already looking for possible joint ventures in the low labor costs countries of Eastern Europe. Things were speeded up with the relocation of our Sparta factory in The Netherlands which will take place later this year. Sparta's modern paint shop will be moved to the new factory in Hungary. Painting and assembling bicycles in Hungary results in a substantial cost reduction. The investments in Hungary fits well into the Accell Group strategy of producing close to its markets in Europe and strengthens the competitiveness of the group. In addition, the investments offers Accell Group the possibility of gaining a market position in Eastern Europe with its future EU member states." (JO)