SKF AB (Sweden; Stockholm: SKFA) announced plans to build a greenfield bearing manufacturing plant in Russia.

Located in the Moscow area, the plant will produce specialty tapered roller bearing units for the country's fast-growing rail infrastructure.

Construction is slated to begin in September 2008, with first bearing production forecast for mid-2010. The facility will eventually employ as many as 150 people.

The plant is currently budgeted at SKR 235 million (USD $36 million).

In addition to vertically integrated bearing manufacturing, SKF's facility will also offer rail bearing reconditioning services.

The company said the plant will, "further strengthen SKF's position as a world leader in the railway industry."

Russia's rail infrastructure is currently modernizing, converting from cylindrical roller bearings and axle boxes to pre lubricated, unitized tapered roller bearing units. The objective is to reduce service lifecycle costs and lengthen maintenance intervals.

In addition to the infrastructure modernization and rebuilding initiative, rail transport coverage in Russia is also expanding rapidly. Russian railways, RZD, is now the world's largest investor in rail transport, both in rolling stock and with a 25% network expansion planned.

SKF did not offer sales estimates.

The country's rail industry is currently served by domestic manufacturers, primarily European Bearing Corp's Stepnogorsk Bearing Plant. EBC reportedly has a 95% share of Russia's rail bearing market, backed by long-term government guaranteed supply contracts.

Earlier this year, EBC announced plans to expand Stepnogorsk, which currently employs more than 2,100 workers producing more than 3 million bearings annually.

article: EBC expanding Stepnogorsk rail bearing plant
In June, HARP revealed an aggressive expansion plan for its Kharkiv Bearing Plant, the second-largest rail bearing supplier in Russia after EBC Stepnogorsk. Kharkiv Bearing Plant currently produces in the range of 600,000 rail bearings each year.

article: HARP plans Kharkiv rail bearing plant expansion