GOTEBORG, Sweden, June 17, 2002 (PRIMEZONE) -- WFO, the World Foundrymen Organization, has chosen to present Volvo's (Nasdaq:VOLVY) foundry in Skovde, Sweden with its newly instituted "Environmental Award 2002" for the development of a new casting process that contributes to a reduced environmental impact from production as well as from the completed truck engines.

"It is very gratifying that our environmental efforts, with extensive investments in advanced technology, have been recognised in such a major forum," says Leif Hultman, manager for Volvo Powertrain in Skovde.

Recycled energy

In the new casting method, FPC (Future Process for Casting), the hardening process of the molten metal is accelerated by placing the casting mould in a water-cooled steel container called a "chill mould." Approximately half of the energy used in the casting process can thereby be recycled. At the same time, the use of moulding sand is reduced, since the moulds can be made smaller.

"The FPC method enables us to save moulding sand, in some cases up to 70%, depending on the casting. The new method also gives us the technical capacity to eventually reduce the risk of odours in the area around the foundry," says Sven-Erik Dahlberg, head of development at Volvo Powertrain's foundry in Skovde, and the man who has led the work in developing this patented process.

Meets environmental requirements

Casting with the FPC method makes it possible to raise the quality of the castings, while reducing the weight of the cast components. "This, in turn, results in lower fuel consumption and reduced emissions, which naturally also strengthens Volvo's competitiveness," adds Sven- Erik Dahlberg.

Technology of the future

The FPC method is currently being used to cast the cylinder heads for Volvo's 9-litre engines and for some of the 12-litre engines. An initial investment of SEK 100 million has been made in a new production line with a capacity of 6,000 tonnes per year (which can be compared with a total capacity of approximately 84,000 tonnes/year, making this foundry the largest of its kind in northern Europe).

"The long-range objective is to cast a greater number of components using this method, which will undoubtedly live up to its name," says Sven-Erik Dahlberg. WFO's environmental prize will be awarded in Korea on October 24.

Appendix: Background information

Goteborg, Sweden, June 2002

For additional information, please contact Claes Claeson, Media Relations, Volvo Trucks, phone: +4631 - 66 39 08 or +46708 - 36 39 08 E-mail: claes.claeson@volvo.com

Background information:

Volvo Powertrain's foundry in Skovde is the largest one in northern Europe. Half of all grey cast iron in Sweden is cast in this facility, whose products primarily include cylinder blocks and cylinder heads, brake drums and discs, and flywheels. The foundry also serves as a competence centre for the Volvo Group's engine developers, and is an active member in Svenska Gjuteriforeningen (Swedish Foundry Association), which in turn is a member of WFO, World Foundrymen Organization.

The WFO Environmental Award will be presented for the first time at the WFO's 65th World Congress in Kyongju, South Korea on October 20-24, 2002. The organisation has members in 35 countries. The competition's regulations state that the prize is to be awarded for exemplary environmental efforts, and for setting a good example for other foundries. A unanimous jury selected Volvo Powertrain as the recipient of the award for "genuinely innovative efforts in the development of the new casting process FPC."

At Volvo Powertrain's foundry in Skovde, work has been underway since 1995 toward developing new materials and methods which make it possible to meet increasingly higher demands on the products' characteristics. Traditional castings have insufficient structural strength to withstand dramatically increased requisite combustion pressures. The FPC method produces stronger material and new possibilities for development.

Many other engine manufacturers are working toward developing compacted graphite iron that is stronger but more resource-intensive than common grey cast iron. Volvo is also working with this material as an alternative for development. The FPC process, with its stable form, is also expected to provide manufacturing advantages in the production of compacted graphite iron.

97% of the raw material in the casting process consists of scrap iron. Casting sand is used at least 10 times before it is disposed of. In traditional casting, approximately 0.5 kg raw sand is consumed per kilo of casting, compared with 0.15 kg in the FPC method.

A considerable amount of energy is conserved by using the new method. The recycled energy from casting one single cylinder head is sufficient, for example, to heat 400 litres of water from the freezing point to the boiling point.

The new patented technology was brought on-line at the Skovde foundry in late 1999. Capacity is currently 6,000 tonnes per year, but will progressively be increased.

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