Siemens earmarks another 10b yuan in mainland push
Europe's engineering giant seeks to boost R&D and output
Siemens, Europe's largest engineering firm which faces a sweeping reorganisation globally, has stepped up its push into the thriving but competitive mainland market by earmarking a 10 billion yuan outlay for investments.
Andreas Matthe, an executive vice-president and a member of the management board of Siemens' mainland operations, said yesterday the investments would be largely for strengthening research and development and boosting production output via greenfield factories and expanding capacity at some of its existing 70 factories.
The investments would be spread across three segments - energy, industry and medical care - a new business structure pending the approval of the board on November 28, he said. Aiming to do away with layers in regional and division management, the new set-up means consolidation of the 10 business units.
'Despite the reorganisation, we are speeding up our investments and strengthening our portfolio here [in the mainland],' Mr Matthe said. 'The economy is growing at 10 per cent annually and China is the most important market.'
The 10 billion yuan outlay marks the second round of 10 billion yuan investments Siemens spent in the past three years. Originally planned for 2004 to 2010, the investments were completed three years earlier than anticipated due to enormous demand, he said. However, he declined to offer a timeframe for the latest 10 billion yuan outlay, except to say it depends on opportunities.
The mainland is key to Siemens' growth. The German firm reported its first loss in six years, losing Euro74 million (HK$846.46 million) in the third quarter against a profit of Euro148 million a year earlier.
Mr Matthe spoke ahead of the two-day International Consultative Conference on the Future Economic Development of Guangdong, an annual meeting in which 22 advisers composed of the top brass of multinational firms advise provincial governor Huang Huahua on the province's way forward.
One of the advisers, Mr Matthe said Guangdong faced two key challenges - energy supply and environmental protection - which warrant urgent and considerable government attention.
'Our recommendation is innovation and technology,' he said. 'For example, innovation and technology can be applied in generating, distributing and consuming electricity to save energy.'
The central government, which attempts to sustain growth by discouraging industrial activities that are energy-consuming, resources-driven and highly polluting, are forcing manufacturers in the Pearl River Delta and Yangtze River Delta to climb the technological ladder and value chain.