Volvo 2007 Annual Report Download - page 42
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Please find page 42 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.Investments
Volvo invests in truck assembly
facilities in Russia
The Volvo Group invested a total of SEK 935 M
in an assembly facility for trucks in Russia.
The new facility will have a capacity of 10,000
Volvo trucks and 5,000 Renault trucks per
year. The facility will be located in the city of
Kaluga, approximately 200 kilometers south-
west of Moscow, and is scheduled to be com-
pleted in 2009.
Volvo invested in production of engines
and gearboxes
As a result of increased demand for the Volvo
Group’s products in emerging markets such as
Eastern Europe and Asia, production require-
ments for heavy diesel engines and heavy
gearboxes are also rising. To meet this
demand, AB Volvo in June decided to invest a
total of SEK 1.7 billion in the Group’s manu-
facturing of diesel engines and heavy gear-
boxes in the period through 2009. The foun-
dry and production plant in Skövde, where
production capacity for heavy diesel engines
will be increased by 20%, will account for a
large part of the investment, slightly more
than SEK 1.1 billion. The investment there will
comprise machinery, premises and environ-
ment-enhancing measures. In Köping, where
production of gearboxes is conducted, the
investment will amount to SEK 400 M, which
will increase production capacity for gear-
boxes by 50%. In addition, minor investments
will be made in a number of Volvo Powertrain’s
plants in other parts of the world, to ensure
that industrial systems are adjusted to the
higher production capacity.
Investment for increased
capacity in France
Volvo invests SEK 530 M in Renault Trucks’
cab plant in Blainville, France. The investment
is made to increase capacity and comprises
both assembly and painting. Renault Trucks’
cab plant in Blainville produces cabs for all of
Renault Truck’s truck models.
Volvo CE decided to invest nearly
1.1 billion in the Component Division
Over the next three years, Volvo Construction
Equipment will invest nearly SEK 1.1 billion in
its Component Division in Eskilstuna, Sweden.
The Component Division develops and manu-
factures axles and transmissions for Volvo
construction equipment. In addition, invest-
ments for increased capacity are being made
for the production of cabs in Hallsberg, Swe-
den and for the production of excavators in
Konz, Germany and in Asheville, USA.
Volvo Trucks invested
in its Umeå cab plant
Volvo Trucks is investing almost SEK 1.1 bil-
lion in its cab factory in Umeå. The investment
covers new production equipment as well as
measures designed to increase capacity and
fl exibility in the production plant. The current
two assembly lines will be replaced by a fl exi-
ble new system where different cab models
can be built on the same line. The degree of
automation and fl exibility will thus increase.
The change has a positive impact on capacity
as well as on the effectiveness and will be
implemented successively throughout the
factory without necessitating any production
standstills.
Company information
Annual General Meeting in AB Volvo
At the Annual General Meeting of AB Volvo,
held on April 4, 2007, the Board’s proposal
was approved to pay an ordinary dividend to
the shareholders of SEK 25 per share and to
carry out a 6:1 share split with automatic
redemption of the sixth share for SEK 25 per
share. The share split was carried out on April
26, which meant that the number of ordinary
shares was fi vefold. Payment for the redeemed
shares took place on May 28. Peter Bijur, Per-
Olof Eriksson, Tom Hedelius, Leif Johansson,
Finn Johnsson, Philippe Klein, Louis Sch-
weitzer and Ying Yeh were reelected mem-
bers of the Board of AB Volvo and Lars West-
erberg newly elected. Finn Johnsson was
elected Board Chairman. Pricewaterhouse-
Coopers AB was elected as auditors for an
additional three-year period.
Volvo fi led for delisting from NASDAQ
In December, AB Volvo applied for delisting of
the Volvo share from the NASDAQ stock
exchange in the US and for deregistration of
the Class B share from the US Securities and
Exchange Commission, SEC. Volvo’s Ameri-
can Depositary Receipts (ADRs), which cor-
respond to B shares, have been listed on
NASDAQ since 1985. Volvo intends to main-
tain the program for ADRs. The delisting
became effective on December 13. Following
the delisting, all trading in Volvo shares is con-
centrated to OMX Nordic Exchange Stockholm.
Volvo raised new fi nancing
During the second quarter, the Volvo Group
raised new funding of EUR 1 billion and SEK
5.1 billion in the European capital markets.
The bond issues were well received in the
market and the Euro bond issue was oversub-
scribed four times. The bond loan of EUR 1
billion will mature in 2017. The loan in SEK
consists of two bond loans, each maturing in
2014. One loan totals SEK 3.0 billion while
the other totals SEK 2.1 billion. These loans
were raised to fi nance the acquisitions during
2007 of Nissan Diesel, Ingersoll Rand’s division
for road development equipment and Lingong,
as well as for the share repurchase and dividend
approved by the Annual General Meeting.
38 Board of Directors’ Report 2007