Scania invests in South Korea

12/17/2001 4:19 AM EST

Scania is to invest USD 1.3 million initially in a new distribution
facility in Sacheon in southern South Korea. The company is also
studying the feasibility of developing Sacheon as a new hub for its
expanding business in the country.

As part of the establishment of Scania's new facility, the company has
signed an agreement-in-principle (letter of intent) with the local
provincial administration regarding the allocation of land and other
support for the development. The intention is to successively
concentrate most of the company's strong and rapidly growing operations
in Korea in this location. In view of the present growth in volumes,
Scania is running the risk of a capacity shortfall in Korea. The
agreement with the provincial administration provides scope for further
investment up to a total of USD 30 million over a five-year period.

If Scania avails fully of the opportunities available for expansion in
Sacheon, the plans will include expansion of the local bodybuilding
operation, which is presently located in Naju. The construction of a new
central parts warehouse is also planned. Sacheon is strategically
located close to two airports and to some of South Korea's most
important deep-water ports.

Following the economic crisis of 1997-98, South Korea has again become
one of Scania's strongest markets in Asia. The company's new sales of
heavy trucks, which declined to almost zero during the crisis, will
reach about 1,200 units this year. As the market leader among imported
makes, Scania delivered 1,100 trucks by 1 November 2001.

For further information, please contact Bo Östlund, Business
Communications,
tel. +46-8-553 82846, e-mail:  

Scania is one of the world's leading manufacturers of trucks and buses
for heavy transport applications, and of industrial and marine engines.
With 26,900 employees and production facilities in Europe and Latin
America, Scania is one of the most profitable companies in its sector.
In 2000, turnover totalled SEK 53,800 million and the result after
financial items was SEK 4,500 million. Scania products are marketed in
about 100 countries worldwide and some 95 percent of Scania's vehicles
are sold outside Sweden.

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