Lufkin Industries expects new Ploiesti plant to begin production by the end of 2012

The American company’s first targeted turnover in Romania is of USD 30 million

Lufkin Industries has announced today that construction has been started at the 33 hectare facility in Ploiesti, after an investment of USD 126 million, part of which EUR 28 million consisted in state aid from the local Romanian government. This new facility will provide oil field manufacturing hubs to service the Eastern hemisphere, with focus on Eastern, as well as Western Europe, Central Asia, Black Sea region, Middle and even Far East, to which 80 percent of production will be directed, with 20 percent focusing on the Romanian market.

The surface that Lufkin Industries has purchased in Aricesti, near Ploiesti is, as previously announced, of 33,000 sqm. The reason behind Romania’s choice as hub for the Asia and Middle East markets lies in the country’s history of 143 years in oil production, its availability of highly-skilled professionals, its geographic position, excellent supply base for the raw materials that Lufkin products necessitate, as well as Romania’s benefits offered by its EU membership, as Jay Glick, CEO and president of Lufkin Romania, explained.

Regarding turnover and investment recovery, Lufkin Industries expects to reach a USD 30 million turnover in its first year of production and then to gradually double, reaching an estimate of USD 70 million in the following two years. Future investment is also expected by the company in Romania, especially due to the large surface that the plant in Aricesti benefits of.

Glick has also explained Lufkin Industries’ choice towards expansion of times of crisis, which can be beneficial if investment is made wisely, since “the market is now quiet”, as Glock put it. The company official also explained why Lufkin opted for a greenfield investment, which was done simply because building a company from the ground was easier than reconditioning an older one, which is the chosen strategy of American companies in the automotive industry, for example (but not the case for Romania, however).

Lufkin Industries’ plant in Romania will become functional in the fourth quarter of 2010 and will be providing jobs for over 320 employees, mostly local and European talent, for whom the recruitment has already begun, as Jay Glick, CEO and president of Lufkin Romania has told Business Review. In the following years, the employee base is expected to extend. Among the local oil companies that Lufkin has contracts with is Petrom, mostly for service equipment.