Volvo Construction Investing $160 Million In Swedish Components Factory

Investment will stretch over three years.

Volvo Construction Equipment said Friday it will invest nearly $160 million in its Component Division in Eskilstuna, Sweden, over the next three years.

The Component Division develops and manufactures power trains for Volvo construction equipment. The current area of 53,000 square meters will be extended to 63,000 and the entire layout of the factory will be adapted to flow-orientated production methods similar to those in the car industry. Money will also be invested in a second furnace in the new hardening plant.

The production capacity of the Component Division has almost doubled since 2002. The investment will mean a further doubling of that capacity in stages, without requiring additional employees to be recruited, the company said.

“Nowadays it’s a question of such large volumes that we are forced to change from work-cell based assembly to line assembly”, says Jörgen Svenningsson, President of the Component Division, which has around 1,200 employees in Eskilstuna. “When the transformation is completed, we will be more efficient and make more components of a higher quality with approximately the same workforce as today, although we may possibly need additional employees during the running-in period."

Volvo Construction Equipment is part of the Volvo Group and is a major manufacturer of equipment for construction and related industries. Its products include wheel loaders, hydraulic excavators, articulated haulers, motor graders and compact equipment.

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