SKF opens two new factories and education centre in China

SKF's new factory for the manufacturing of large size bearings in Dalian, in the North East of China, has now started to operate.

SKF's new factory for electromechanical actuators and actuation systems in Pinghu, outside Shanghai in China, has also started to operate. Both factories were inaugurated with local ceremonies in the presence of local authorities customers and Group Management. The new large size bearing factory, strategically located in one of the most industrialized and fastest growing areas of the world, will support the fast growing demand from the local market as well as the rest of Asia. The first phase in the construction of the plant, that is equipped with state-of-the-art technology is now finished and some 100 employees have, after extensive training, started to work. The factory and the manufacturing will now increase stepwise until reaching full capacity when the factory will employ some 240 persons. The key customer segments that will be served by this factory are metalworking, power generation, mining and construction, pulp and paper and wind energy. The plant in Pinghu, that is part of the Jaeger business acquired by SKF a year ago, will serve a fast growing local demand for actuation systems. The new factory employs today some 140 people and will supply customer segments such as medical technology, conveying and manufacturing technology, automation and robot engineering and workplace ergonomics. When in full operations the Pinghu plant will employ some 400 people. - China is in size today SKF's fourth market. It is growing with a very high speed and we are focusing on becoming the clear market leader in this challenging market, says Tom Johnstone, President and CEO of SKF. - Our sales in the Chinese market today exceed three billion Swedish kronor on an annual basis and we have a little more than 2 500 employees in this country. We have now eight factories and are building one more for the manufacturing of bearings to the automotive industry. We cannot expand our manufacturing capacity in the present plant so we need to build a new larger factory close to the existing one. The market is growing at a speed that exceeds 20 percent per annum, says Mr Johnstone. To support the training of its own employees as well as its customers, SKF has also now opened an SKF College in Pinghu. - We have decided to run our own SKF Colleges in different parts of the world to ensure we can train our own people as well as our customers and distributors in the necessary technologies and other competencies to ensure we can offer the market the best solutions, continues mr Johnstone. Now we have such SKF Colleges in four countries including China. Our experience from the colleges already working is extremely good and in growing markets like China it is very important to ensure this training. - Over the last three years we have invested about one billion Swedish kronor in expanding our presence and manufacturing capacity in China. We will continue to invest what is necessary to ensure our leadership in this market and to also establish a manufacturing base that can support the Group's global development, says Mr Johnstone. Göteborg, September 11, 2006 Aktiebolaget SKF (publ.) For further information, please contact: PRESS: Lars G Malmer, SKF Group Communication, tel. +46 (0)31 337 1541, e-mail: Lars.G.Malmer@skf.com IR: Marita Björk, SKF Investor Relations, tel. 031-337 1994, e-mail: Marita.Bjork@skf.com