ABB invests $280 million in new robotics factory in Sweden

ABB invests $280 million in new robotics factory in Sweden

ABB is spending $280 million on a new robotics factory in Sweden, the Swiss engineering and technology group said on Wednesday, to meet growing demand triggered by customers moving production from Asia closer to their home markets.

ABB, whose products range from industrial motors and drives, to chargers for electric vehicles, will build the new factory at its site in Vasteras, eastern Sweden.

The new facility, due to open in 2026, will have 50% more production capacity than its old site and employ 1,300 people, ABB said.

"The investment in our new campus is driven by customer demand and projected market growth," ABB CEO Björn Rosengren said in a statement.

ABB said the European robotics and automation market is expected to grow by 7% per year between 2023 and the end of 2027, driven by companies bringing back production from Asia.

The company, which competes with Japan's Fanuc Corp and Chinese-owned Kuka supplies robots to companies including BMW, Scania and Volkswagen.

Manufacturers are responding to greater government incentives, with the European Union earlier this year relaxing state aid rules to allow the bloc's national governments to match subsidies offered under President Joe Biden's $369 billion Inflation Reduction Act in the United States.

Rising tensions between Washington and Beijing have also made some companies rethink their manufacturing footprint and bring factories closer to home.

ABB said it also wanted to serve its customers with more locally manufactured products, a hot topic after companies suffered supply chain bottlenecks during the COVID-19 pandemic.

Customers are also investing in robots as they face shortages in skilled labour.

"This new Campus is key in supporting our European customers as they accelerate investment in robotics and AI due to the reshoring of industry, the move to more sustainable supply chains and long-term labour shortages," said Sami Atiya, President of ABB's Robotics and Discrete Automation Business Area.

"Our Robotics Campus will help us to serve our customers more efficiently and support new and existing sectors like automotive, electronics, logistics, healthcare, e-commerce and pharmaceuticals to unlock the full potential of automation.