BORG Automotive increases capacities for year three of the pandemic
In 2021 BORG Automotive, Europe’s largest independent remanufacturer, remained the highly dependable partner, to whom aftermarket distributors and workshops have become accustomed. This is due, not least, to the fact that almost its entire value creation takes place in Europe. Nevertheless, the company with reman products sold under the brands Elstock, Lucas, DRI and TMI, is already making production and logistics even more resilient. Among other measures, inventories and production capacities in Poland are to be massively expanded.
Europe has entered the third year of the pandemic. In 2021, many producers once again struggled with vulnerable supply chains. BORG Automotive was certainly also affected by impaired international supply chains however, the companies’ overall availability of goods was not threatened.
“We source a very limited number of parts from outside Europe – therefore the problems of international supply chains and container shortages have not affected us to the same extent as other companies,” explains Ernst Kildegaard, Group Supply Chain Director at BORG Automotive Group. “The bottom line is that we are proud of the relatively high availability and frequency of delivery, we were able to ensure last year.”
BORG Automotive sees rising demand
Nevertheless, BORG Automotive have set themselves the goal of making the supply chain even more resilient. First, because the company expects the pandemic-related disruptions to keep the industry busy well into 2022. Secondly, because it is seeing increasing demand for its remanufactured starters, alternators, AC compressors, EGR valves, turbochargers, steering racks, steering pumps and brake calipers.
“We provide remanufactured products in OE quality produced in Europe, which ensures short lead times. Furthermore, our supply chains are short and make it possible for us to react fast to changes in demand. Many customers have experienced how our European manufacturing footprint reduces risk of supply in times of crisis, and the interest in our products is increasing. Also affected by the increasing interest in sustainable solutions” says Kildegaard.
To continue to meet the higher demand under and after pandemic conditions, the remanufacturer has decided on far-reaching measures, and is gradually putting them into practice. Keeping a high inventory of used parts, known as "cores”, is an example hereof. Currently, BORG Automotive keeps more than one million original cores suitable for remanufacturing in stock on a continuous basis. The general storage capacity at the Polish logistics site is also planned to be expanded, just as the production sites in Zdunska Wola and Lublin, Poland. In Lublin the capacity will be increased in order to triple the currently produced output. The expansion in Zdunska Wola will already have an effect this year, while the expansion in Lublin will be initiated this year and is expected to be finalized in 2024.
Tendency towards using European suppliers
The pandemic and the worldwide supply chain challenges have had far-reaching implications when it comes to the markets’ ability to keep goods in stock. “Therefore, we experience a tendency to increase the use of European based suppliers to secure deliverables,” Kildegaard comments.