ABB invests $280 million in new robotics factory in Sweden

ZURICH (Reuters) – ABB is investing $280 million in the construction of a new robotics factory in Sweden, citing increasing demand from customers who are relocating their production from Asia to their home markets. The Swiss engineering and technology group, which offers a range of products including industrial motors, drives, and electric vehicle chargers, will construct the new facility in Vasteras, eastern Sweden.

Expected to be operational in 2026, the new factory will have 50% more production capacity than the previous site and will provide employment opportunities for 1,300 individuals, according to ABB. The company’s CEO, Björn Rosengren, stated that the decision was made in response to customer demand and projected market growth.

ABB highlighted that the European robotics and automation market is projected to experience an annual growth rate of 7% between 2023 and the end of 2027, largely driven by companies shifting their production from Asia. The company, which competes with Japan’s Fanac Corp and Chinese-owned Kuka, supplies robots to renowned companies such as BMW, Scania, and Volkswagen.

Manufacturers are increasingly responding to government incentives, with the European Union relaxing state aid rules earlier in the year to allow national governments to match subsidies offered under President Joe Biden’s $369 billion Inflation Reduction Act in the United States. Additionally, rising tensions between Washington and Beijing have prompted certain companies to reconsider their manufacturing footprint and bring their factories closer to home.

Furthermore, ABB expressed the intention to provide its customers with locally manufactured products, which has become a critical issue following supply chain disruptions during the COVID-19 pandemic. In addition, customers are investing in robots to address the shortage of skilled labor.

Sami Atiya, President of ABB’s Robotics and Discrete Automation Business Area, stated, “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. 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.”

Reporting by John Revill; Editing by Tomasz Janowski