Volvo Construction Equipment said this week it will invest SEK 350 million, about U.S. $52 million, to build a 20,660-square-meter excavator plant in Kaluga, Russia. The plant will be built on the 15 hectares of land Volvo acquired in 2007.
The Kaluga plant will initially manufacture five models of Volvo excavators including the Volvo EC210, EC240, EC290, EC360 and EC460. The company expects to begin production in the first quarter of 2013.
“The new investment in Russia is part of our strategy to build machines where they are sold, and thanks to a strong partnership with our Russian dealer Ferronordic, our customer base is growing significantly in the country,” said Volvo CE president and CEO Pat Olney. “We have seen a strong commitment from Ferronordic, which is investing a substantial amount of money to support their further expansion in the Russian market.”
Volvo said the construction equipment market in Russia is estimated to reach about 25,000 units in 2011.