Volvo Construction Equipment to invest SEK1.1bn in expanding Component Division in Eskilstuna, Sweden

Nordic Business Report, March 16, 2007

NORDIC BUSINESS REPORT-16 March 2007-Volvo Construction Equipment to invest SEK1.1bn in expanding Component Division in Eskilstuna, Sweden(C)1994-2007 M2 COMMUNICATIONS LTD http://www.m2.com

Sweden's Volvo Construction Equipment (Volvo CE), part of Volvo Group (Nasdaq: VOLV), said on Friday (16 March) that it will invest SEK1.1bn in extending its Component Division in Eskilstuna, Sweden.

The investment involves extending the currently 53,000 square metre facility to 63,000 square metres, and converting the layout to flow-orientated production methods similar to those in the car industry, Volvo CE said.

The Eskilstuna plant is currently operating at full capacity and is unable to meet future growth targets.

"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," said Jorgen Svenningsson, president of Volvo CE's Component Division.

Volvo CE's Component Division develops and manufactures axles and transmissions for Volvo construction equipment, and has 1,800 employees in Eskilstuna.

Volvo Group is headquartered in Gothenburg in Sweden. The company manufactures trucks, buses, construction equipment, engines and components, and has 82,000 employees in more than 185 countries. Volvo is listed on the Nordic Exchange in Stockholm and on the Nasdaq.

One British pound (GBP) is worth approximately 13.71 Swedish kronor (SEK).

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