Brazilian motor manufacturer wants to quadruple production in China

24 November 2006

Sao Paulo, Brazil, 23 Aug – Brazilian group WEG, which manufactures electric motors and has factories in five countries, plans to increase its production in China four-fold by the end of 2009, the company’s spokeswoman, Cristina Santos told Macauhub Wednesday.

The Brazilian company, which produces motors in its Nantong unit, in Jiangsu province, which altogether generate 80,000 kw/month, wants to increase that production to 160,000 kw/month in 2007 and double it again by the end of 2009, she said.

“We plan to increase our penetration of the Asian market, improve operational and commercial logistics and generate better competitiveness,” the company’s chairman, Décio da Silva said in a statement.

In 2004, Weg acquired Nantong Electric Motor Manufacturing, and since 2005 has produced industrial low and medium voltage electric motors at its Chinese unit.

As well as having a factory in China, Weg has seven units in Brazil, three in Argentina, two in Mexico and one in Portugal as well as having sales offices in 19 countries.

In order to increase production in China, Weg has begun expanding its factory in the country – which sits on a 67,000 square meter plot – by building two new buildings at an investment of US$12.5 million, the company’s spokeswoman said.

The new facilities will begin operating in the first quarter of 2007 and will house the Components and Assembly departments, increase the capacity of the current production lines and introduce new products with technology developed at headquarters, in Jaraguá do Sul, in the Brazilian state of Santa Catarina (Southern Brazil).

As part of the strategy to move ahead into the Asian market, Weg plans to invest some US$30 million in the Nantong factory in the 2006/2007 period, according to Santos.

The Brazilian company overall plans to invest US$92 million in 2007, with 15 to 20 percent of that figure earmarked for foreign units, mainly in China and Mexico.

Weg posted profit of US$61.1 million in the third quarter, a 31.6 percent rise on the same period of 2005. (macauhub)