Brazilian motor manufacturer WEG’s profit rises 19 pct in Q1

27 April 2006

Sao Paulo, Brazil, 27 April – Profit in the first quarter of 2006 for Brazilian electrical motor manufacturer WEG rose by 19.1 percent to US$55.42 million, the company said Wednesday.

In the period from January to March 2005 WEG posted profit of US$46.56 million.

The profit increase was due to 18 percent growth in sales in Brazil and 29.4 percent in foreign markets, the company said in a statement.

In the first three months of 2006, the company’s operating income totaled US$70.09 million, a rise of 25.8 percent year on year.

The company also announced it was acquiring a 30 percent stake in Mexican transformer manufacturer Voltran.

The Mexican company, whose revenues totaled US$25 million in 2005, is located in Tizayuca, some 50 kilometers from Mexico City.

The acquisition is part of WEG’s strategy to widen the group’s activities in North America, which currently accounts for 33 percent of WEG’s foreign sales.

The Brazilian group also plans to open an office in Singapore in the first half of the year, as a way of boosting its activities in Asia, the statement said.

Total investments by the group in Brazil and abroad in expansion and modernization projects in 2006, will be US$82.56 million, a 17 percent increase in relation to 2005.

The group currently has factories in Argentina, Portugal and China, as well as having sales units in the US, Venezuela, Germany, England, Belgium, France, Spain, Italy, Sweden, Australia, Japan, Chile, Colombia and India.

WEG, which is one of the world’s largest electric motor manufacturers, will also invest this year in expanding and modernizing its Chinese factory.

The aim is to transform the Chinese unit, which was bought in 2004, into an export base to double the group’s sales on the Asian market.

Last year WEG posted profit of US$176.79 million, a fall of 7 percent in relation to the result for 2004. (macauhub)