Volvo 2007 Annual Report Download - page 41
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Please find page 41 of the 2007 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Acquisition of Ingersoll Rand’s road
development equipment division
On April 30, 2007, Volvo concluded the acqui-
sition of US based Ingersoll Rand’s road
development equipment division, other than
operations in India which followed on May 4.
The division was consolidated in the Volvo
Group as of May 1, 2007. Ingersoll Rand’s
operations in road development equipment
comprise soil and asphalt compactors, asphalt
pavers and milling machines. The purchase
consideration for the assets amounted to
about USD 1.3 billion, about SEK 8.8 billion.
Ingersoll Rand’s road development division –
with production facilities in the US, Germany,
India and China – has about 2,000 employees
and headquarters in Shippensburg in Pennsyl-
vania, USA. Operations posted sales in 2006
of USD 864 M, about SEK 6.4 billion, with
operating profi t of about SEK 745 M.
Volvo divested interest in
Petro Stopping Centers
Volvo Trucks North America divested its entire
28.68% ownership in US truck stop chain
Petro Stopping Centers Holding L P to Travel-
Centers of America and Hospitality Properties
Trust. The purchase consideration amounted to
SEK 316 M (USD 46.3 M). The transaction
resulted in a capital gain of SEK 316 M affect-
ing second quarter operating income in Volvo
Group’s truck segment. Volvo Trucks North
America purchased its holding in Petro in 1999
to strengthen its network of parts and service
points in North America. Since then, major
investments have been made in the Volvo dis-
tribution network in North America and, accord-
ingly, ownership in Petro now has less strategic
importance.
Renault Trucks concluded truck-
production agreement with Turkish
company Karsan
In July, Renault Trucks concluded a coopera-
tion agreement with the Turkish independent
auto manufacturer Karsan concerning pro-
duction of trucks for the growing markets in
Turkey and neighboring countries. Karsan will
produce the trucks on behalf of Renault
Trucks at Karsan’s plant in Bursa, Turkey, as of
2009. The models to be produced by Karsan
will be Renault Premium Route, Renault
Premium Lander and Renault Kerax. The
vehicles will be distributed via Renault Trucks’
dealer network in Turkey and neighboring
countries. Karsan’s plant will have the capacity
to produce approximately 5,000 vehicles
annually. Karsan has 817 employees and
manufactured a total of 12,500 vehicles in
2006. In 2006, the Turkish market for vehicles
with a weight exceeding six tons amounted to
more than 40,000 units.
Volvo invested in environmentally
sound forestry machinery
Volvo Technology Transfer AB is a new part-
owner in El-forest AB, based in Örnsköldsvik,
Sweden, and is thereby investing in the devel-
opment of energy efficient and environ-
mentally sound forestry machinery.
Volvo signed letter of intent with Indian
vehicle manufacturer Eicher
The Volvo Group has signed a letter of intent with
the Indian vehicle manufacturer Eicher Motors
Limited regarding the establishment of a new
Indian joint-venture company. According to the
letter of intent, the joint-venture company will
hold Eicher’s entire truck and bus operations and
the Volvo Group’s Indian sales operations within
trucks. The joint-venture company will have its
production mainly concentrated to Eicher’s cur-
rent plant in Pithampur in India. The joint-venture
company will have about 2,300 employees and
the operations within the joint-venture company
that come from Eicher Motors had sales in 2006
of about SEK 3.0 billion and operating income of
SEK 128 M. The operating margin for the period
was 4.2%. Implementation of the transaction
requires the approval of the affected government
authorities and the shareholders in Eicher Motors
Limited. The transaction is expected to be
completed before mid-year 2008.
Acquisition of composite company ACAB
In December Volvo Aero acquired the composite
company Applied Composites AB (ACAB) in
Linköping, Sweden, which currently has approxi-
mately 70 employees. As a consequence of the
acquisition, Volvo Aero will invest approximately
SEK 50 M in research and development within
the area of composites during the next 18
months. Volvo Aero intends to immediately
establish a new operation that will develop and
manufacture certain selected aircraft engine
components in composite materials. These
components will be signifi cantly lighter than
comparable components in metal and will then
signifi cantly infl uence the fuel consumption and,
thereby its carbon dioxide emissions. ACAB was
founded in 1988 and is a prominent company
within development and construction of advanced
composite products.
Board of Directors’ Report 2007 37