Volvo Construction Equipment has announced that it is to consolidate its manufacturing capacity in Americas by relocating backhoe loader manufacture from Tultitlán, Mexico, to the company’s production facility in Pederneiras, Brazil.
In a bid to streamline production and gain efficiencies of scale, Volvo Construction Equipment (Volvo CE) today announces that, as part of a strengthening of its industrial footprint in the Americas, regional production of backhoe loaders will move from its current production facility, in Tultitlán, Mexico, to a newly enlarged facility in Pederneiras, Brazil. In addition to local production for the Latin American market, backhoes produced in Pederneiras will be exported to North America and other markets.
As part of a $10 million development, the Pederneiras facility will be extended to accommodate production of Volvo backhoe loaders. Critical componentry will be produced on site, such as dipper, lifting and boom arms, frames and cabs. Ultimately, a significant proportion of backhoe loader content will be either made in-house or sourced locally; supporting the Brazilian economy as well as reducing currency risk and import duties.
“This decision allows us to take advantage of existing competences and the significant investments we have made in the Pederneiras hub, and further consolidate our industrial footprint in the Americas region,” commented Andy Knight, Volvo CE’s president of Operations in the Americas.
The move of backhoe production to Pederneiras will impact the 115 Volvo CE employees currently working at Tultitlán. A detailed human resources plan has been developed in collaboration with Volvo Bus (which manages the site). The move of production to Pederneiras will take place progressively throughout 2013.
Operations at the Volvo Bus manufacturing facility in Tultitlán will continue to concentrate on bus manufacturing.