ABB, the Swiss engineering and technology group, announces a substantial investment in a new robotics manufacturing facility in Sweden to meet the increased demand from companies relocating production from Asia due to supply chain disruptions.
ABB is committing $280 million to establish a cutting-edge robotics factory in Sweden, signaling its strategic response to a surge in demand from companies seeking to move their manufacturing operations out of Asia to avoid supply chain disruptions.
Rising Tensions and the Reshoring Trend
Growing geopolitical tensions, particularly between the United States and China, have prompted many manufacturers and other robotics users to reevaluate their global manufacturing strategies and consider relocating their production away from China.
Bjorn Rosengren, Chief Executive of ABB, acknowledges the emerging reshoring trend and explains that while ABB remains committed to China, some American companies are exploring alternative investment destinations in Asia. He noted, “There are probably some, especially American, companies who are hesitating about investing in China and maybe doing that in other Asian countries instead.”
Rosengren recognizes that China’s economic recovery from the COVID-19 pandemic has been weaker than expected. However, he maintains a positive outlook on China’s long-term growth potential, stating, “It’s the biggest market for growth; we believe China will be strong even though it will be more China for China and not so much China for the world.”
He emphasizes that China, as the world’s largest robotics market, remains a crucial market for ABB. The company has no immediate plans to scale back its investments in China. ABB established a $150 million robot manufacturing facility in Shanghai last year and expanded its operations in the United States.
The new Swedish factory, located in Vasteras and scheduled to open in 2026, will complement ABB’s existing facilities. It is expected to primarily serve European customers, with the capacity to increase production by 50% to meet the projected 7% annual growth in European robotics demand.
Rosengren reaffirms ABB’s strong commitment to the robotics sector, emphasizing the sustainability of recent improvements in the division’s performance. Many customers are increasingly seeking local supply sources, especially after experiencing supply chain disruptions during the COVID-19 pandemic.
ABB is a global competitor in the robotics industry, facing off against companies like Japan’s Fanuc Corp and Chinese-owned Kuka. ABB provides robotics solutions to prominent companies such as BMW, Scania, and Volkswagen.
Rosengren observes a shift in global supply chain dynamics, explaining, “The globalization trend has gone down a little bit, and every company is looking at their supply chain. It’s becoming more local for local.”