Power firm to maintain plans for long-term growth in China

Updated: 2012-03-08 08:13

By Li Fangfang (China Daily)

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The ABB Group, a power and automation technology company, doubled its investment in China in 2011 despite the country's slowing economy, and says it plans to keep investing at a similar rate to pave the way for its own long-term growth.

The Swedish-Swiss company released its 2011 financial results for China on Wednesday, showing that its revenue in the country was $5.1 billion for the year, a record increase of 21 percent from 2010. ABB also set a record in annual investment by putting $230 million into the country, more than double the amount of the previous six years.

Markus Kistler, chief financial officer for ABB North Asia and China, said the company plans to keep its 2012 rate of investment into the Chinese market the same as last year despite uncertainties stemming from such factors as increasing labor costs, the possibility of markets further opening up and increasing domestic consumption.

"The long-term market outlook remains positive," said Claudio Facchin, president of ABB North Asia and China. "Thus we need to continue investing heavily here in China to promise sustainable growth."

Facchin said there were several reasons for the company's good results in China last year.

"Industries demand a higher level of automation to improve energy efficiency, quality, productivity and operational health and safety," he said.

"China's 12th Five-Year Plan (2011-15) to migrate from a resource-intensive economy to a low carbon and knowledge-based economy was taking off. ABB was able to support this positive change due to its consistent investment in technology and capacity in China under its 'in China for China' strategy."

With the electric motors and drivers ABB delivered to Chinese customers in the past 14 years, the company helped the country save 138 billion kilowatt hours of electricity. If everyone in the country used as much power as Beijing residents did in 2010, those savings were enough to give power for a year to 1.94 billion people.

ABB also said its exports reached more than 40 countries in 2011, with an increase of 50 percent in the total value.

"We are a preferred supplier for Chinese companies going global, thanks to the strong research and development, engineering (and) manufacturing capabilities built up locally in China, in addition to ABB's global resources and brand," Facchin said.

Talking about 2012, Facchin said: "We have felt the economic slowdown in the last six months, especially in housing, railway and shipbuilding, and 2012 is a year with new challenges. However, I am confident China will remain a high growth market, and we will continue to invest in technology and people here."

According to a recent report released by Roland Berger Management Consultants (Shanghai) Co Ltd, sales of power transmission and distribution equipment in China will increase steadily until 2015, when they are expected to reach the record-high value of 320 billion yuan ($50.7 billion).

Driven by China and other emerging markets, sales of such equipment throughout the world attained a value of $120 billion in 2011. Over the next five years, those sales are expected to continue to increase at an average annual rate of 4 percent and their value is expected to be $154 billion by 2015, the report said.