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Johnson Controls buoyed in China

By Paul Welitzkin in New York | China Daily USA | Updated: 2016-12-22 12:25

China's growing demand for hospitals, airport expansion and higher education facilities are expected to drive growth for Johnson Controls International PLC's two main business segments in 2017 and beyond, according to the company's vice-president and president for Asia Pacific.

Trent Nevill said Johnson is also excited about unveiling its new headquarters building and campus in Shanghai, scheduled for June 22, 2017.

"This will be the first time in our history that everything from leadership to sales will be located in one building," Nevill said at the company's investor day conference in New York on Dec 5. "Historically we have operated in pieces spread over Shanghai. We like the synergies the new building and campus will produce in conjunction with our growth strategies."

Nevill said the new building, which will house about 1,200 employees, will be the greenest building in China. "This is a statement for what we stand for and how we will support China's 13th Five-Year Plan," he added.

Johnson has a long history in China, having opened a branch office there in 1920. But it wasn't until the 1990s that it established manufacturing facilities in the country. Today, the company employs nearly 10,000 people at its consolidated operations on the mainland.

In 2016 the company completed its merger with Tyco International PLC, a fire protection and security systems specialist based in Ireland. Johnson has spun off its automotive seating and interiors business into a separate company called Adient.

"We are well positioned as a market leader to accelerate growth in our core buildings and energy businesses," chairman and CEO Alex Molinaroli said in a statement.

What's left after the merger is a company with two main business segments - building technology in areas like fire protection and security and power solutions in batteries, Nevill said.

Nevill said Johnson is aiming for growth in its China and Asia Pacific business that should mirror closely the goal of 6.7 percent growth in China's gross domestic product or GDP.

"We would like to grow as fast as the market will permit us if not slightly above that," he said.

Nevill said construction growth in China is leveling off along with other sectors of the mainland's economy, as everyone adjusts to the new normal of GDP expansion in the 6.5 percent range, down from previous years' double-digit growth.

Johnson expects solid growth in construction's vertical markets like healthcare and education.

"There will be 3,000 private hospitals built in China over the next five years," Nevill said. "We also anticipate steady growth in airport construction and data centers."

The growth in airports, data centers and higher education should create good demand for Johnson's building technology applications.

"If you look at our product portfolio, it caters well to a technology intensive environment. For example a data center will require sophisticated cooling and fire safety solutions," said Nevill.

(China Daily USA 12/22/2016 page2)

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