JCB plans to increase production in Brazil
Valor Econômico
The heated demand for earthmoving machines and excavators in the emerging markets helped JCB increase nearly 50% its earnings last year, leading the company to plan an increase of its productive capacity in Brazil and in India. The earnings of the main supplier of backhoes in the world rose from 1.35 billion pounds (US$ 2.2 billion) in 2009 to 2 billion pounds in 2010. The production of units, which fell from 57 thousand in 2008 to 36 thousand in 2009, recovered and reached 51.6 thousand at the end of last year, above the forecasts of July.
Anthony Bamford, Chairman of the Board of Directors of the family-controlled company that exports more than 80% of its British production, insisted that the United Kingdom remains the center of production and engineering, at the same time he announced a US$ 100 million investment to increase its production in Brazil and an investment of US$ 30 million in a new engine plant in India. "With markets growing so quickly, this is the right time to strengthen our already strong presence in Brazil."
The growth of the international production should reduce the participation of the United Kingdom in the production from 60% to nearly 50%. But JCB, which had a record year in India, selling more than 21 thousand units, experienced an improvement in the business conditions in Europe and North America. The improvement helped the company raise the productivity levels in the British plants, which allowed JCB to rehire more than 1,000 employees after being forced to lay off 1.8 thousand workers during the recession.
JCB should announce a strong recovery in the profits when it discloses the figures of the year as a whole, later this year. Restructuring costs weighed on the company, traditionally a reference for the companies of the British industrial sector, with profits falling from 187 million pounds in 2007 to 28 million pounds in 2008, and remaining stuck at 29 million pounds in the following year.
The company is the third largest global supplier, in volume, in the segment of excavating machinery, behind the American Caterpillar and the Japanese Komatsu. The strong market position of JCB in midsize and smaller machines has been helping to improve its luck.