Volvo Construction Equipment to expand Korean plant
Volvo Construction Equipment has decided to expand and upgrade its Korean production site in Changwon, South Gyeongsang Province, as the Swedish heavy machinery manufacturer looks to better cope with growing customer demand worldwide.
According to Volvo CE on Wednesday, the company will invest approximately $264 million to bolster its crawler excavator footprints at three main production sites in Korea, Sweden and North America. The largest share of the investment is slated for Korea's Changwon factory.
Although the allocation of funds between the sites was not disclosed, the company said the investments would be carried out over the coming years.
Volvo CE said the investment plan includes upgrading the Changwon site to secure global volumes and capabilities in Asia while leveraging supply chain capabilities to enhance efficiency, reduce costs and improve responsiveness to market demands. Volvo CE also pointed out that the Changwon plant remains an important factory in the company's global industrial network as it holds key competencies for manufacturing, product development and purchasing.
The Changwon plant, which exports over 80 percent of the total production, has the biggest excavator manufacturing capacity within the Volvo Group worldwide.
For the rest of the investments, Volvo CE said the final decision regarding the location, scope and timing for the Swedish expansion will be made later this year. The company will set up an excavator assembly line at its existing factory in Shippensburg, Pennsylvania, for the North American market.
By adding production capacity near key regions, the heavy machinery maker expects to improve operational efficiency and resilience while ensuring shorter delivery times and offering customized solutions for regional needs. The global expansion is also aimed at lowering carbon emissions by minimizing transportation distances, the company said.
"We understand the need to respond to growing demand and are excited to expand our facilities to serve customers better," said Melker Jernberg, head of Volvo CE.
"This investment underscores our commitment to quality, innovation and competence, allowing us to deliver even greater value. This expansion demonstrates our efforts to respond to customer demand by investing in our crawler excavator business closer to key markets and customers."
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