SKF Increases Automotive Bearing Production in Brazil

SKF do Brasil (Brazil; a subsidiary of SKF AB, Sweden) said it has brought online an additional level of production for automotive bearings, following higher demand and shifting production. The plant in Cajamar has had many rounds of infrastructure and production investment over the years, yet remains capacity-constrained with production dedicated to bearings for the auto industry. While adding capacity allows SKF to go after more contracts, it also potentially allows SKF to weather a production interruption; something it is ill-equipped to do at such a key facility consistently running at or near capacity. This most recent investment program reportedly cost just over R 1 million (USD $460,000) and helped push Cajamar's yearly production capacity up by more than 7 million units over last year. Increasing demand by automakers in both Asia and the United States is behind the moves; the added volume is already assigned for those markets. In mid-2005, SKF announced the closing of its sprawling wheel bearing hub assembly plant in Aiken, South Carolina, with production shifted to Mexico, South Korea and Italy. However, many believe most key units from Aiken wound up at Cajamar. By November 2005, SKF had added capacity for 5 million hub units to Cajamar; this latest investment boosts that to 7 million. SKF do Brasil's sales are 80% from automotive bearings and 20% from other automotive components such as water pump bearings, water pumps, auxiliary drive pulley kits, cam belt tensioner kits, hydraulic valves, and sensor-equipped bearings. With all of Cajamar's production currently dedicated to the auto industry, SKF has indicated plans to add industrial bearings at some point, if only to offset the plant's single-market exposure.