Investing for growth Automotive Components Floby

INVESTING FOR GROWTH

Recently taken over by the Volvo Car Group, Automotive Components Floby manufactures automotive components including brake discs, wheel hubs, and connecting rods for passenger cars and commercial vehicles. Romana Moares reports on how the company’s current production profile and plans for the future now it has the backing of the international group.

Previously known as Amtek Components AB, Automotive Components Floby (AC Floby) has only been registered under its current name since 27 July this year following Volvo’s 100 per cent share purchase. Prior to this, however, there was already a strong history of mutual dependence between Volvo and the Floby, Sweden-based manufacturer. In fact, up until 2015 the plant was owned by Volvo but at this time it made the decision to divest it to the India-based Amtek Group. There followed two years of independent existence, but ultimately Amtek was not able to fulfill the terms of the agreement – hence the renewed Volvo ownership.

However, it is important to remember that in the past two years the former Amtek Components had in fact managed to achieve considerable success with growing sales and good capacity utilisation. Its customers from the automo¬tive and commercial vehicle sectors have been enjoying increasing demand and the company has secured several new projects for the near future.

Magnus Johansson, AC Floby’s sales and marketing director, says: “In the last two years we have focused our efforts on proper setting up all necessary functions that had been centrally organised before, such as HR, Finance, IT systems and so on,” he says, adding that the company has had a really good start up. “Demand for all of our product groups is increasing and we are in the process of reviewing our investment strategy. If needed, we will expand production capacity to suit the increased volume of requirements, while, of course, maintaining the quality of our performance.”

Mr Johansson is also keen to stress that as far as the company’s structure and supplier relationships is concerned, nothing will change. “The plant will continue to run as a standalone company, with its own sales, purchasing, marketing and so on. Nothing has changed in terms of the organisation, production profile or supplier relationships – all that has changed, in essence, is the name of the company and the owner of its stock.”

Core production focus

AC Floby employs 480 people concentrated in a single manufacturing facility and is a major employer in the region of south-¬west Sweden – an area where many automotive manufacturers are located. Its product range is divided into three groups – brake discs, wheel hub and connection rods – which are all equally strong, but Mag¬nus Johansson foresees some changes in the future in order to keep up with trends in the rapidly changing automotive industry.

“Electrification is the big topic of the day and this will of course significantly change the industry. This will no doubt have a con¬siderable impact on us. We need to be prepared for the changes, prepared to meet the need for new products which will be required as a result of the changed automotive environment.”

lightweight and effective

He points out that the company’s R&D engineers have been working on improvements towards more lightweight products, in anticipa¬tion of future trends in the automotive industry. One example of this approach is the silicon carbide reinforced aluminium (SCRA), which is the basis of products that are lightweight and durable at the same time. “The advantage of using SCRA in brake discs is that it is incredibly durable with excellent heat conduction, at the same time being significantly lighter than steel. Brake discs using the SiCaLight technology are installed in some variants of the Volvo V40,” says Mr Johansson, and adds that the lightweight solution is now ready to enter the market on a larger scale.

“We have had a very good response recently. Although we have had this product for some time, the markets were not mature enough. This is now changing, and with the shift to electric cars, we believe that there may be a good opportunity for this product.”

He foresees that the changes will also affect the company’s key strategic product, connecting rods for cars, which it has been producing since 1990 in various types including connecting rods for highperformance engines in sports cars and modern diesel engines. “With the development of electric cars, demand for this type of product will decrease, but this is a long term vision, maybe in some 20 years’ time. In the meantime, we want to use our extensive experience and know-how to improve the connecting rod proper¬ties – we now make connecting rods from various materials, and our great flexibility allows us to bring in new materials. The focus here is on lightweighting too.”

All of AC Floby’s products are made to customer specifications and this is one of the company’s competitive advantages. “We try to be partners to our customers, to help them design the most effective specifications allowing the part to be made in the most cost-effective way, while achieving the highest quality and good performance level,” stresses Magnus Johansson.

The future is bright

Swedish car and commercial vehicle makers represent the dominant section of the company’s customer base, but it also supplies manufacturers in other European countries such as France, Belgium, the UK and Germany, as well as in other parts of the world. “We are a global supplier,” says Mr Johansson. “Our plant is only some 150km from the port of Gothenburg, from which goods are shipped all over the world. So,

unlike some manufacturers in Europe, we have an easy global reach. This is another competitive advantage.”

“We rely on good partnership with our suppliers and their good performance. Reliable suppliers represent a very important asset for us. In this context I would like to highlight in particular our excellent relationship with several German and Danish companies but we value all of our suppliers, in whichever country they are based.”

He maintains that despite the change in ownership the company will stay on its course to continue growing, developing and expanding its customer base. Indeed, thanks to the stability that comes from being a part of an international giant like Volvo, it is putting an extensive investment plan in place to install new machining equipment for its entire scope of products. The figure will run into hundreds of millions of SEK.

He concludes: “We are optimistic about the future. We believe that, despite the growth in the Asian auto industry, there is a big potential for the automotive and commercial vehicle sectors in Europe. Even though the markets have become global, there will be local produc¬tion everywhere. We want to ensure that we have an even stronger position in this local growth.” n