ABB Group, the Swiss-Swedish industrial automation and electricity supply technology company, is banking not only on hundreds of electric vehicle start-ups in China, but also millions of small and medium-sized manufacturers in the country, to fill up the order books at a robotics factory it is building in Shanghai. The Zurich-headquartered company, which also has robotics factories in Sweden and the United States, is betting big on further growth in the demand for automation in China – the world’s largest industrial robotics market since 2013 – as its working population shrinks and labour costs escalate. It is investing US$150 million in the factory, billed by Ulrich Spiesshofer, its chief executive, as “the most advanced, automated and flexible in the world”. The facility in Kangqiao, a southeastern suburb of Shanghai, will also be bigger than its plants in Europe and the US. ABB is helping NIO, the Shanghai-based electric car start-up, build a highly automated factory and is providing fast-charging solutions for batteries used in its vehicles, which are key to its success, said Spiesshofer. “China has more than 400 companies in the electric vehicles sector. There are tremendous opportunities for us to help with the wave of investment in electric vehicles manufacturing,” he told the South China Morning Post on the sidelines of the ABB FIA Formula E Championship, the world’s first fully electric global motorsport series, held in Hong Kong last month. ABB also expects to tap China’s small and medium-sized enterprises market, where adoption of automation has so far been limited by high costs. “The hurdles for SMEs to own robots are not only the cost of buying the robots, but also that of planning, installation and operation,” Spiesshofer said. “ABB has pre-engineered solutions that lower these hurdles significantly. “I’m very confident the growth rate will be in the double digits in the SME sector, in terms of robot usage, in the years to come.” ABB’s Shanghai factory, which will also target makers of communications and computing equipment, food and beverage companies and manufacturers of machinery, is on track to be operational by the end of next year. With an annual capacity of more than 100,000 robots – around a quarter of global total production capacity in 2017 – the plant represents a “quantum leap” for ABB, Spiesshofer said, adding that some exports to other countries in Asia were also expected. China’s working-age population shrank by 4.3 million in 2017, its biggest drop since it began falling in 2014. Combined with fast rising labour costs, this has forced companies to automate their factories. Still, China’s robotics density – 97 per 10,000 factory workers – was less than half that of the US’s at 200, and a seventh of South Korea’s 710, in 2017. As part of Beijing’s “Made in China 2025” industrial master plan, the number of industrial robotics is to jump tenfold to 1.8 million units by 2025, when up to 70 per cent of the robots used in China will be made in the country, from half in 2020 and 30 per cent last year. ABB is not alone in betting on China. German rival Kuka, which was acquired by Chinese electrical appliances maker Midea in 2016, is building a factory in Shunde, in China’s southern Guangdong province. This facility, a 10 billion yuan complex, will have an annual capacity of producing 75,000 industrial robots by 2024.