by Chris Holland Business Reporter Heckmondwike is once again to become the head office and main machine tools production hub for engineering giant the 600 Group.

The company is pulling the plug on a Polish venture which it bought for nearly £900,000 less than two years ago and is also moving its small head office operation from Leeds back to Heckmonwike.

The developments follow a strategic review of the business launched by new chief executive Nigel Rogers who arrived at the company in March.

The machine tools operation is based at the original site of lathe maker T S Harrison, which joined the 600 Group in 1971 and whose brand is still used along with another market leader, Colchester lathes.

More than 100 people are employed at the Union Street site where company bosses will be based and the Leeds office on Revie Road, near Leeds United football ground, put up for sale.

The company, which last month warned that its results for the year to March 2012 were unlikely to meet market expectations, is to start insolvency proceedings for its Polish subsidiary, which it bought in November 2010 in what was seen as a ‘transformational’ deal.

But spending around £4 million upgrading the Polish production facilities at Tarnow, which was designed to replace manufacturing previously outsourced to Asia, proved a drain on the business.

Following its closure 600 Group will revert to using distributors to sell its products in some European markets, a model that was successful in other overseas markets and accounted for 60 per cent of global revenues.

The company said the Polish operation had not met the anticipated level of output, suffered from escalating costs and significant trading losses and absorbed working capital from group resources.

Nigel Rogers, chief executive, said: “The strategic review has clearly identified areas where we need to rationalise our operations and reduce costs in order to improve the performance of the group. This will protect the brand heritage, and maintain the reputation that the group has for quality and reliability.

“We have listened carefully to the considered views of our key distributors across Europe over the last few weeks, and customer demand for our products remains strong. Our priority now is to improve lead times and delivery performance so as to drive increased revenues.”

He said that since March 600 Group had reduced its bank borrowings by £1.9 million to £3.3 million, mainly through the sale of a non-core subsidiary business in South Africa.

The cost base of the UK business was also being reviewed and was expected to produce annual cost savings of £600,000.

The impact of the review and restructure would be reflected up in 600 Group’s accounts for the year to March 2013.

Mr Roger believes implementing the strategic review will result in significant improvements in the trading performance and future prospects of the machine tools business and the Group as a whole.