SWEDEN: Sweden's SKF, the world's biggest bearings maker, plans to hunt bigger game than usual in its acquisition search and will also spend $75 million on two new plants in Asia. SKF, whose bearings are used in products ranging from dishwashers to passenger jets, has in recent years focused on small, bolt-on acquisitions to cement its market leading position.
"We intend to make acquisitions that are a little bit bigger than before," Chief Financial Officer Tore Bertilsson told investors, analysts and journalists at a capital markets day on Thursday.
"We are looking also at medium-sized companies." Bertilsson said acquisitions activity had slackened as the global financial crisis triggered a freefall in market demand across the world and put many prospective deals on hold.
"We did around 20 acquisitions during 2003-2006, and hopefully we will come back to that level," he said. "There are several companies out there that would fit SKF."
SKF said it would build a new factory for medium-sized bearings in Dalian, China, to cater to fast-growing demand across Asia, investing about 400 million Swedish crowns ($54 million).
The group will also invest about 160 million crowns ($21.6 million) in a new seals factory in Mysore, India, to serve automotive, railway and industrial applications customers.
SKF affirmed its guidance for slightly higher demand in the third quarter from the second, and Chief Executive Tom Johnstone told Reuters the company had not seen any hit from the debt turmoil and fiscal austerity across parts of Europe.
"What we see is effects like infrastructure spending, railways and so on, are not growing. But is it having any dramatic effect on our business? No," he said.
"It's very much in line with what we expected six weeks ago when we announced this (guidance). There are always detailed changes (across markets), but there is nothing significant we see that affects our third quarter."
In its July outlook, SKF said it expected demand in Europe, its single biggest market, to be unchanged in the third quarter from the preceding three months of last year. [ID:nLDE66E08B]
SKF shares were up 2.5 percent at 132.8 crowns by 1002 GMT, outperforming a 1 percent gain in the Stockholm bourse's blue chip index.
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