UTC promises to invest more after opening new Otis plant
Updated: 2012-09-22 09:30
By Li Fangfang in Chaongqing (China Daily)
Officials from US manufacturing giant United Technologies Corp have promised to continue investing in China, after officials opened a new 100 million yuan ($15 million) Otis Elevator factory in Chongqing municipality.
With an initial annual production capacity of more than 15,000 elevators, the factory will supply elevators particularly to the rapidly developing cities of central and western China.
Otis is the world's largest manufacturer of elevators, escalators and moving walkways, and now China accounts for more than half of global new elevator sales, said Pedro Baranda, Otis' global president.
Otis is owned by UTC, a global manufacturing operation behind a host of high-tech aerospace and building brands, including Pratt & Whitney aircraft engines and Sikorsky helicopters.
UTC reported $4.4 billion in sales revenue in China in 2011, through its network of 25 manufacturing facilities and more than 40 joint ventures.
"China's continued potential for urbanization and infrastructure development presents a great opportunity for the global elevator and escalator industry," said Baranda.
"As the industry leader, our investment in this factory signifies our commitment to provide safe, energy efficient, and reliable products and services to our Chinese customers for many years to come."
Otis figures suggest the country now accounts for one out of every two elevators it sells globally. It has so far installed approximately 400,000 elevators and escalators in China.
It also exported 15 to 17 percent of the elevators it produced in its Hangzhou plant to overseas markets.
According to the China Elevator Association, China is the world's largest elevator manufacturer and consumer, with annual sales totaling 95 billion yuan.
Its figures shows that in 2011, China manufactured 406,000 elevators and 51,000 escalators in total, which accounted for 70 percent and 95 percent of the global new equipment installations of the year, respectively, with a combined year-on-year growth rate of 25.2 percent.
Moreover, China exported 31,000 passenger elevators and more than 16,800 escalators to more than 140 countries and regions in 2011, according to China Customs statistics, making China also the world's largest elevator exporter.
"Obviously, the elevator industry in China has a promising future, though the growth rate over the next five years will vary to some extent because the market demand depends on real estate and transportation infrastructure construction, which are heavily influenced by government policies," said Zhang Lexiang, deputy secretary-general of the association.
Tom Vining, president of Otis China, added: "Our new facility in Chongqing will support the significant growth opportunities in central and western China and beyond.
"We also foresee a growing replacement market, as real estate owners and developers start modernizing all of their old elevators."
Louis R. Chenevert, chairman and chief executive officer of Otis parent UTC, added that despite the economic slowdown this year "China is an engine for growth of our whole group in the future".
He added: "The only challenge we are facing now is how to support UTC's fast growth in China.
"We need to always bring the latest technologies and most advanced products (here) and the faster we localize, the faster we can provide the latest products to meet the booming local demand.
"UTC will put heavy investment in many new projects to come," he said.