Chinese engine maker building new casting facility.

Guangxi Yuchai Machinery Ltd Co., Yulin, Guangxi, China, has begun the first construction phase of a $14.1 million metalcasting facility.

The facility, which will be constructed gradually, has a total planned area of 1,800 acres and eventually will employ six casting production lines. It will manufacture cylinder heads and cylinder blocks for its parent's light and heavy duty diesel engines.

Phase one of the construction project will see the completion of 1,000 acres and three casting production lines. The first line is expected to be constructed and tested for trial production by December 2009, with casting production capacity for 160,000 mid-sized engines. The second and third lines will be completed for trial production by the end of 2010 and 2012.

Management expects that phase one of the construction project will provide local employment for more than 1,000 while upgrading Guangxi Yuchai's product quality and lowering overall production costs. The company also expects the first phase will produce enough castings to fuel annual growth of 15-30% for the next several years.

In addition to diesel engines for construction equipment, trucks, buses and cars in China, Guangxi Yuchai produces diesel power generators, primarily for the construction and mining industries. In 2007, the company sold approximately 383,000 diesel engines.