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ABB lines up major expansion

By Li Fangfang (China Daily)
Updated: 2009-05-13 08:03

An ABB industrial robot on show at an industrial equipment expo in Shanghai. [CFP]

ABB Ltd, the Swiss-Swedish engineering group, is investing $150 million this year to expand and develop its facilities in China.

"Despite the current global financial crisis, I believe demand for ABB's technologies to improve industrial productivity, energy efficiency and grid reliability will continue to grow," said Joe Hogan, chief executive officer, ABB Ltd. "Our continued investment will contribute to China's economic growth and prepare ABB for the economic recovery."

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Hogan's confidence stems largely from China's fiscal stimulus package that focuses on power infrastructure. The government will spend $132 billion to expand power grids by 26,000 km, with more demand for new power equipment between 2009 and 2010, compared to the $19 billion direct spending in the United States.

"We are happy to see that China, our group's biggest regional market, is the first to respond to the financial crisis with the biggest spending," said Hogan.

While global energy demand is set to jump more than 50 percent by 2030, "we believe 30 percent of the world increase in power demand will come from China", added Brice Koch, president of ABB North Asia and chairman of ABB China.

Hogan also said the Chinese government's plan to improve energy efficiency by 20 percent between 2006 and 2010 provides ABB huge business opportunities, even in such difficult economic situations.

Hogan, who is on his maiden visit to China after taking over as CEO, inaugurated ABB Engineering (Shanghai) Ltd's new multi-business manufacturing facility in the Pudong New Area of Shanghai yesterday.

Spread over 70,000 sq m, the new buildings and site can significantly improve production capacity.

The new site also provides manufacturing, sales and engineering services for applications such as robotics, instrumentation products, analytical integration systems, control and protection devices and substation systems.

It will also double ABB's robot manufacturing capacity in China, and will produce all of the company's paint robots by the end of 2009. The site also accommodates ABB's global production base for instrumentation products, double production capacity for flow meters, and increase pressure-transducer production by 50 percent.

The new site includes ABB "Analyzer House", its biggest integrated analytical system in the world.

The company also plans to introduce the latest production lines for high-voltage relay protection, monitoring and control devices, as well as delivering differential protection, transformer protection, bus protection and measurement and control products for the domestic and overseas markets.

"ABB will hike total investment in China to $1.16 billion and also invest to expand operations in six local companies this year," said Koch.

Last year, ABB reported $4.5 billion in order intake and $4.1 billion total revenue from China, its biggest market in the world.

Hogan said he expects ABB's revenue to grow this year as it consolidates its leadership in China through aggressive expansion.