Capacity increases

High Demand For End-Items Increases The Demand For Components And suppliers are moving to increase capacities. For example, Volvo's Components Division began the expansion of its 53000 m2 axle and transmission factory in Eskilstuna, Sweden this Spring as part of a capital expenditure project of SEK 1,1 billion (120 million) over three years.

The division, which had already doubled its production since 2002, is adding 10000 m2 to the factory, which has 1200 workers. Other changes include a second furnace in a new hardening plant, new machine tools, and implementation of new production concepts, similar to those found in the automotive industry.

Meanwhile, on the other side of the globe, Sweden's Haldex is acquiring China's Runguang Hydraulics, a 40-year supplier of hydraulics components to local equipment manufacturers. Haldex has formed and owns 85% of a new company, Haldex Hydraulics (Qingzhou) Co. Ltd, to make hydraulic pumps, valves and cylinders, mainly for wheel loaders and excavators. It estimates initial annual sales to be about SEK 130 million (14,2 million).

The company, 15% owned by the management group of the earlier company, has 1200 employees and will operate at a new plant facility in Qingzhou, in the Shandong province. It will conduct sales and coordinate production with two other, new Haldex-owned plants in Suzhou.

Haldex's expansion in China, “Gives us an opportunity to offer a broad line of locally produced hydraulics products for the Chinese market, and to develop a manufacturing base for global exports,” said Brian Nelson, acting manager of Haldex Hydraulic Systems Division.