WEG unveils investment in new factory in Turkey

The investment, scheduled for completion in 2027, will boost WEG’s gearbox production outside Brazil. The new facility will be housed in a leased building in Manisa, 35 kilometers from Izmir, where WEG acquired Volt Electric Motors in September.

Rodrigo Fumo, WEG’s managing director of industrial motors, told Valor that the company has been active in the Turkish market for over 20 years, initially through local distributors. In 2021, WEG established its commercial structure in Turkey, followed by the inauguration of an electric motor factory in Dilovasi, near Istanbul, in 2022.

WEG employs about 750 people in the region, and the new investment is expected to create 150 additional jobs in Turkey.

“We saw an opportunity to go further. Despite the intense market competition, our traditional competitors are not present here. That opened the door to acquiring Volt Electric Motors and exploring other market opportunities,” Mr. Fumo explained.

“The goal is not only to serve the Turkish market but also to increase our footprint in Europe, North Africa, and Central Asia, which this new factory will supply,” he added.

Unlike other projects where WEG prioritizes purchasing land, the decision to lease property in Turkey was driven by the high cost of real estate in the country. This aligns with WEG’s regional growth strategy for the next decade. The global gearbox market is estimated at $13.5 billion, with WEG holding just 1% of that total. The company sees this move as an opportunity to drive revenue growth.

“In the initial phase, we will fund this investment with our capital while leveraging the tax incentives offered by the region. The Turkish government has been attracting various industries to this area and is keen on WEG continuing to invest there,” Mr. Fumo highlighted.

However, he acknowledged that Turkey faces challenges in stabilizing inflation. With this new unit, WEG strengthens its global market position. Over the past 24 years, the company has established 47 factories in 17 countries as part of its international expansion strategy.

Maintaining a track record of continuous growth without financial leverage, the Santa Catarina multinational company has solidified its status as one of the world’s leading players in the electric equipment and automation sector in 2024.

WEG’s shares have risen nearly 58% this year, driven by strong performance in the electric motor sector. In 2024, the company surpassed Ambev in market capitalization, becoming the fourth most valuable company on the B3 stock exchange, valued at R$240 billion, trailing only Petrobras, Itaú, and Vale.

For the same time frame, WEG’s market capitalization increased by R$86 billion, according to Valor Data. That places the company closer to Vale, which has experienced a R$100.3 billion drop in market capitalization so far this year.

For 2024, WEG has outlined an investment plan of R$1.9 billion, aimed at expanding capacity amid strong global demand for transformers, energy storage systems, wind turbines, solar energy, and electric mobility solutions.