Volvo foresees record production in 2010
Valor Econômico
The resumption of sales in the Latin American countries that were the most affected by the economic crisis and the maintenance of Brazilian demand for heavy equipment, especially in segment of construction, should lead Volvo Construction Equipment to a record year of production at the Pederneiras plant (SP). For 2010, the expectation is that more than 3 thousand pieces of construction and extraction equipment, such as loaders and motor graders should be produced, in the only plant Volvo CE has in the country, exceeding the historical mark of 2008.
The improvement in the businesses in the region, according to the CEO of Volvo CE Latin America, Yoshio Kawakami, was already evident at the end of 2009, a year in which the volumes produced in Brazil fell nearly 50% to nearly 1.5 thousand units. The company had to lay off 100 employees of the São Paulo plant at that time. "Those 100 employees were hired back at the beginning of this year", he said. Despite the optimism, Volvo CE does not foresee investments in increase of the productive capacity in the country. According to Kawakami, nearly US$ 10 million should be invested this year aiming at the modernization of the plant of São Paulo, whose occupation rate should remain between 70% and 75%. "Since 2008 was an exceptional year, we have to make somewhat bigger investments this year in order to modernize the production line. But there is still installed capacity to meet the demand", he said.
In 2009 Brazil increased the purchases of equipment from Volvo by 17%and was responsible for 73% of the 2,460 pieces of equipment sold in Latin America, a record volume responsible for the good performance of the company in the region. In the same period, the sales to the other Latin American countries retreated 61% to only 646 machines. As a result, the country's participation in the international businesses of the company grew 2 percentage points compared to 2008, to 5% - the leader, China, is responsible for 49% of the sales of Volvo CE.
For 2010, the company foresees the sale of 2,897 pieces of equipment in Latin America, 68% of which in the Brazilian market. The smaller participation expected for the country in relation to 2009, according to the Officer, reflects the bet on the recovery of the sales to other Latin American countries, espaciallly Mexico and some markets of the Caribbean. "These areas should show stronger recovery since the falls were also bigger in 2009", he explained.
The best response of Brazil during the economic crisis was motivated by the investments in infrastructure and by the increase of the variety of products sold by Volvo in the domestic market, according to Kawakami. Currently, the portfolio of the company includes 61 products, compared to the 25 it used to have.