Swiss engineering and technology group ABB has announced plans to invest $280 million in a new robotics factory in Sweden. The move is in response to the growing demand from customers who are shifting their production from Asia back to Europe to avoid supply chain disruptions.

The rising tensions between the United States and China have made some manufacturers reconsider their manufacturing footprint and move production away from China. ABB CEO Bjorn Rosengren acknowledged this trend, stating that some American companies are hesitating to invest in China and are choosing other Asian countries instead.

While ABB sees the re-shoring trend, the company remains committed to China. However, the Chinese economy has experienced a weaker-than-expected recovery from the COVID-19 pandemic. Despite this, Rosengren remains positive about China’s long-term potential, stating that it is still the largest market for growth.

The new robotics factory in Sweden, located in Vasteras, is expected to primarily cater to European customers when it opens in 2026. The facility will increase production capacity by 50% to meet the expected 7% annual increase in demand for robots in Europe. ABB already operates a $150 million factory in Shanghai and has expanded its facility in the United States.

Due to supply chain bottlenecks experienced during the pandemic, many customers now prefer local supply options, which has led to a shift towards more localized production. ABB, a major competitor in the robotics market, supplies robots to companies such as BMW, Scania, and Volkswagen.

Overall, ABB’s investment in the new robotics factory in Sweden reflects the re-shoring trend and the need for localized production to ensure a stable supply chain in the face of global uncertainties.

Source: Reuters