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Schaeffler to spend €76 mln expanding Hungarian production

Schaeffler KG, a German auto parts maker, will spend €76 million (Ft 19.7 billion) expanding production at its Hungarian units as it benefits from lower wages in the country.

The company will spend €47 million constructing a new plant at its east Hungary subsidiary, FAG Magyarország Kft, which manufactures ball-bearings, Lajos Fülöp, a director at the unit said at a press conference today. The company will also increase its workforce there by 350 to 1,150 by next year, Fülöp said. Schaeffler will spend €29 million expanding clutch production at its other Hungarian subsidiary, Luk Savaria Kft, in west Hungary, Luk Savaria Managing Director Stefan Stoecklein said. Developments at both units will be finished by the end of 2007. Schaeffler is expanding in Eastern Europe as it benefits from low labor costs. Schaeffler Chief Executive Officer Juergen Geissinger said in July the company was suffering from "higher labor-related costs" in Germany. The German company employs 57,300 people at more than 80 plants worldwide and had annual sales of about €7 billion last year, the company said.