Volvo to invest in Component Division

VOLVO Construction Equipment (Volvo CE) have announced a three-year plan that will see nearly SEK1.1 billion (£80 million) invested in their Component Division in Eskilstuna, Sweden. The money will be spent on extending the factory, purchasing new production equipment, developing a new production and assembly concept and implementing cross-functional working methods.

‘This investment will make us more competitive and will secure jobs,’ said Jörgen Svenningsson, president of the Component Division, which has around 1,200 employees in Eskilstuna. ‘The current factory area of 53,000m2 will be extended to 63,000m2 and the entire layout of the facility will be adapted to flow-orientated production methods, similar to those used in the car industry.’

Mr Svenningsson explained that Volvo CE’s Component Division, which develops and manufactures powertrains for the company’s construction equipment, had reached full capacity and was therefore unable to meet future growth targets set by Volvo CE, despite operating with five daily shifts.

‘Nowadays it’s a question of such large volumes that we are forced to change from work-cell-based assembly to line assembly,’ he commented. ‘The investment will make it possible in the long run to downsize to three shifts on the processing line and two shifts on the assembly line.

Ultimately, this latest investment will mean a further doubling of the production capacity of the Component Division, which has already almost doubled since 2002.

‘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. The factory will be a model installation in the industry,’ said Mr Svenningsson.