United Power Technology AG has reached the final stages of completing the buildings of the phase 3 expansion of its production site in Gaoqi Industrial Park. In total the company will add four new four-story factory buildings with a total usable factory space of more than 45,000 sqm and one new dormitory to the current factory space. The new buildings are intended to be equipped with modern production lines, which will further increase the efficiency and the production capacities of United Power.

The completion of the buildings of the third phase expansion phase is scheduled according to plan for November 2014. The expansion of the production site in Gaoqi Industrial Park is part of an investment plan that was decided on in 2012 but had to be postponed due to adverse market conditions in the industry for engine-driven power equipment. The total investment budget for the expansion project amounts to about EUR 36 million in 2014, of which 90% are designated for the property and the equipment.

However, due to the currently on-going difficult market environment, United Power will not fully utilize the entire budget. The investments will likely not exceed EUR 19 million this year as United Power carefully monitors the market environment to decide on the timing for investments into the new production lines. However, in the meantime, given the prime location of the production facilities in Gaoqi Industrial Park, not utilized factory space may be rented to third-party companies providing an attractive additional income stream.

The first production lines will start the operations during the year of 2015. The project lays the foundation for United Power's further pursuit of its three-pronged strategy for future growth. Thereby, United Power focuses on scaling up product sizes and generators with higher output and larger engine sizes.

Furthermore, it aims at a broadened range of different engine-powered products and on geographic expansion as well as penetration by further diversifying its international customer base and by strengthening its brand in new markets. In addition, the Management Board has also devised regional sales strategies and implemented different measures to support its sales forces. Although the market environment currently continues to be difficult, there remain to be good growth prospects in other new growth regions, particularly in markets such as Latin America and Southeast-Asia, which United Power aims to take advantage of.

Furthermore, the Management Board expects the consolidation process of the industry in China as well as the conflict in Russia, both mainly responsible for the decrease in revenues, to be of a timely limited nature. Therefore the expanded production site will serve as an ideal platform for an upswing in the industry and provide United Power with a strong market position.