Tech Giant ABB Invests USD 280 Million in New Robotics Factory By CIOTechOutlook Team

Tech Giant ABB Invests USD 280 Million in New Robotics Factory

CIOTechOutlook Team | Wednesday, 13 September 2023, 08:41 IST

ABB announced a $280 million investment in a new robotics factory in Sweden to fulfill increased demand caused by clients shifting operations from Asia closer to their home markets. ABB, whose products range from industrial motors and drives to electric car chargers, will construct the new factory in Vasteras, eastern Sweden. As per ABB, the new factory, which is set to open in 2026, will have 50% greater production capacity than the previous one and will employ 1,300 people.

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

The European robotics and automation market will grow by 7% per year between 2023 and 2027, owing to companies relocating production from Asia. The company, which competes with Fanuc Corp of Japan and Kuka of China, provides robots to companies such as BMW, Scania, and Volkswagen. Manufacturers are responding to increased government incentives, with the European Union loosening state aid regulations early this year to allow the bloc's national governments to match subsidies granted in the United States under President Joe Biden's $369 billion Inflation Reduction Act.

Rising tensions between the United States and China have also caused some corporations to reconsider their manufacturing footprint and relocate operations closer to home. ABB also stated that it wished to provide more locally manufactured items to its clients, a major topic after companies experienced supply chain difficulties during the COVID-19 pandemic.

Customers are likewise investing in robotics as skilled labor becomes scarce.