NIB has provided a EUR 75 million loan to the Swedish heavy transport vehicle manufacturer Scania to finance the company’s new foundry in Södertälje, Sweden.
This eight-year loan funds Scania’s new foundry for producing cast cylinder heads and blocks. The existing foundry, with its limited manufacturing capacity, can no longer supply the company’s current needs; hence today 60% of cylinder heads and blocks are sourced from elsewhere. Scania’s new foundry will allow a capacity increase from the current 30,000 tonnes a year to 90,000, and it will be able to supply current and future needs of its European vehicle production plants.
The investment in a new foundry is one of Scania's largest single investments in new plant. The total project costs amount to EUR 165 million, and the construction is planned to start in January 2019. The new foundry will give a noteworthy competitive edge to the company and support Södertälje (located close to the capital, Stockholm) in remaining a hub for engine production.
“The Swedish automotive industry is highly important for the country’s economy, as it accounts for substantial employment, exports and value added. Investment in capacity expansion is therefore vital to maintain technological leadership in the region”, says Henrik Normann, President & CEO of the Bank.
Scania is a global company with sales of trucks, buses and services in 100 countries, employing approximately 52,000 people. Scania's production units are located in Europe, South America and Asia.