Scania plans to invest about SEK 1.5 billion (more than NZ$254 billion) in a new foundry in Södertälje, Sweden, in order to triple production capacity and achieve a 50% reduction in energy consumption compared with the technology and methods used in the current foundry. Through more efficient materials handling and recycling, a reduction will also be achieved in the transport need per manufactured unit. The foundry will be operated using electricity produced from renewable energy sources.
“In the ongoing shift towards a fossil-free society, even more energy-efficient combustion engines as well as combustion engines that operate on biofuels and gas will be needed,” says Ruthger de Vries, executive vice president, head of production and logistics at Scania. “Particularly for trucks and buses in long distance transport. The new foundry will be instrumental in providing such engines.”
The investment in a completely new foundry is one of Scania’s largest single investments in an entirely new industrial plant. The investment decision was made after a comprehensive analysis of various alternatives, such as increased purchasing from external suppliers or a conversion and extension of the existing foundry.
“A completely new plant is the most cost-efficient solution and the best alternative from an environmental and quality standpoint when it comes to the future supply of strategically important parts for our engine production,” says de Vries. “Through this investment, we will also retain important proximity to our research and development organisation, which is concentrated in Södertälje. Meanwhile, this means that Södertälje will continue to be the hub for our European engine production.”
Construction of the new foundry is planned to start in January 2019.