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Voith to add to investment in China
By Tang Zhihao ( China Daily )
Updated: 2011-11-18

Voith to add to investment in China

The Three Gorges Dam project at Yichang, Hubei province. Zhang [Photo/ China Daily]


SHANGHAI - Voith GmbH, the German provider of technology and industrial services, will invest an additional 250 million euros ($336.5 million) in China before 2016 to support its growth in the Chinese market, according to the company's chief executive officer.

 

Voith to add to investment in China

 

Having been active in China for more than 10 years, the company has already invested some 271 million euros in the industrial sector around the country. It has deep penetration in government-backed infrastructure programs such as the Three Gorges Dam project and the development of the nation's high-speed rail projects.

Voith generated approximately 1 billion euros in sales in China during its last fiscal year (Sept 2010 to Sept 2011). The company said that revenue from the Chinese market accounts for 18 percent of its annual sales globally.

"That is nearly as much as we make in Germany, which has been our home market for 144 years," said Hubert Lienhard, Voith's president and chief executive officer.

Benefiting from China's robust economic growth and high levels of government investment, the company's growth rate in the country was 27 percent annually between 2006 and 2010.

Lienhard said the company aims to increase annual sales revenue to 1.5 billion euros by 2016.

To better support growth in the Chinese market, the company has developed plans to increase the proportion of machine components that can be manufactured in the country.

"We're expanding our investment in locations such as Kunshan (in Jiangsu province) and Minhang (in Shanghai). In next 5 years we hope that over 25 percent (of sales) will come from China," said Lienhard.

"My aim is we will manufacture everything needed for the Chinese market in China".

Lienhard said China will continue to be a significant market in the next five years, and the government's long-term commitment to improving infrastructure facilities means the group is keeping a close eye on the market potential.

"China will be the largest economy in the world. Every company that is not truly embedded in this economy will not be important in the world," said Lienhard.

He added that localization is the most important growth-support strategy in China. At present, 99 percent of the company's management in China is Chinese, and Lienhard said that he will try to ensure that the figure rises to 100 percent when possible.

"It means we have a local management that truly understands the customers. That way we can develop products solely for this market," said Lienhard.

 
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