Dive Brief:
- Schneider Electric plans to invest $140 million in upgrading and expanding its Tennessee operations this year, part of a strategy to tap into rising demand for grid infrastructure and data centers.
- The energy equipment manufacturer will spend $85 million to "transform and equip" an existing building in Mt. Juliet, Tennessee, as well as its existing Smyrna, Tennessee manufacturing operations.
- The new Mt. Juliet plant is expected to be fully operational in 2025 and plans to recruit up to 455 new workers across the two facilities.
Dive Insight:
The Tennessee operational upgrades follow recent investments in Schneider's Lexington, Kentucky; Lincoln, Nebraska; and Mechanicsburg and Middletown, Pennsylvania, plants.
Schneider is on a years-long journey to invest $440 million in its U.S. manufacturing network, with moves to streamline production, strengthen its U.S. supply chain and lower its carbon footprint.
The company is experiencing double-digit revenue growth in its systems segment, which includes data center and infrastructure orders. The segment grew 17% in Q4 2023, boosted by artificial intelligence-driven demand, according to the company's 2023 financial report.
"North America was up 10% organic and against a high base of comparison with double-digit growth in the U.S. and high single-digit growth in Mexico, both driven by continued demand across end markets, particularly data center and infrastructure," EVP and Group CFO Hilary Maxson said on Schneider's full year 2023 earnings call in February. "And due to that demand, we’re continuing to stabilize and invest in our supply chain in North America, particularly for residential offerings and in our Systems business."
Schneider's strategy to capitalize on that demand is clear in its recent U.S. investments. The company inked a $3 billion agreement with data center design and construction company Compass Datacenters in November to build prefabricated modular IT data centers.
The company also recently opened its fourth Texas plant, building an electrical equipment factory in El Paso, Texas.
Schneider is one of multiple manufacturers growing production capacity for electrical grid infrastructure equipment. Siemens Energy announced plans earlier this month to build a $150 million power transformer factory in Charlotte, North Carolina.
