ABB (ABBN.S), a Swiss engineering and technology business, said on Wednesday that it would invest $280 million in the construction of a new robotics facility in Sweden. The move is being made to address increased demand from clients shifting manufacturing back from Asia to prevent supply chain log jams.
The escalating tensions between Washington and Beijing have also caused several manufacturers and other users of robots to reevaluate their industrial footprint and relocate output outside of China.
Bjorn Rosengren, the Chief Executive Officer of ABB, said that his business was witnessing indications of the trend of re-shoring even though his company remained in China.
During an interview with Reuters, he said, “there are probably some, especially American, companies that are hesitating about investing in China and maybe doing that in other Asian countries instead.” “There are probably some American companies that are hesitating about investing in China.”
According to Rosengren, the recovery of the Chinese economy from the COVID-19 epidemic has been less than projected, even though he remains optimistic about the nation’s long-term prospects.
“It’s the biggest market for growth, and we believe China will be strong, even though it will be more China for China and not so much China for the world,” he added.
He said that China, now the largest market for robots worldwide, will continue to be very important for ABB and that the firm had no intentions to reduce its investment in the country.
The Swiss corporation constructed a new robot factory in Shanghai with an investment of $150 million in the same year it expanded its facilities in the United States.
The locations will work with the forthcoming facility in Vasteras, Sweden, which is scheduled to open in 2026 and will primarily cater to consumers in Europe.
The new facility will raise manufacturing capacity by fifty percent, allowing it to keep up with the anticipated seven percent annual growth in the demand for robots in Europe.
Rosengren said that ABB’s robotics business will “absolutely, definitely” continue to play an important role in the company since the recent gains in the division’s performance are sustainable.
After suffering through supply chain constraints due to the COVID-19 epidemic, many consumers want an increase in local supply.
Already supplying robots to firms such as BMW (BMWG.DE), Scania, and Volkswagen (VOWG_p.DE), ABB is in direct competition with Fanuc Corp (6952.T) of Japan and Kuka (KUKAF.PK), which the Chinese control.
Rosengren said that the trend toward globalization has slowed down somewhat, and as a result, every firm is evaluating its supply chain. “It’s getting more local for people who live there.”
