Revealed: the 10 billion yuan masterplan to turn Midea into China’s robot powerhouse

China’s largest maker of home appliances wants to take the next step in manufacturing: build robots

PUBLISHED : Thursday, 11 August, 2016, 3:38pm
UPDATED : Friday, 12 August, 2016, 10:17am

Midea Group Co., hot on the heels after buying a German robotics maker, is planning to spend 10 billion yuan (HK$11.7 billion) to build a factory in southern China to expand its capacity to assemble automatons.

The factory in Foshan city is capable of producing as many as 7,000 robots a year, comprising 2,000 industrial robots and 5,000 commercial automatons, according to a notice by the Development Planning & Statistics Bureau of Shunde district in Foshan.

The 15-year project is aimed at enhancing Midea’s capacity to produce robots for sale, as well as upgrading its capability in intelligent manufacturing. The innovation centre and factory, occupying 270,000 square metres of land, will include clusters of buildings, several factories and a research centre.

By 2025, a total of 17,000 industrial robots will be produced from the Midea factory, according to the planning bureau’s notice, citing Midea’s plan. A spokeswoman for Midea’s public relations firm Brunswick confirmed Midea’s plan by telephone, declining to identify herself.

The investment underscores Midea’s ambition to lead China’s forays into automation and robotics. The company, based in southern China’s Guangdong province, is the country’s biggest maker of air conditioners, refrigerators and so-called white goods appliances, employing as many as 135,000 people in the country and overseas.

China’s factories bought and installed 68,000 industrial robots last year, a 17 per cent increase from 2014, making the country the world’s largest market for automation.

Midea on Monday announced it was buying more than 94 per cent of German robotics maker Kuka AG, one of the world’s biggest producers of robotic systems. The takeover would be one of the largest unsolicited bids for an overseas company by a Chinese buyer.

Kuka, founded in 1898 in the southern Bavarian city of Augsburg, employs 12,000 workers, earning nearly 3 billion euros in revenue last year.

Early last month, Kuka announced a venture with Chongqing-based Changan Industry (Group) Co. to set up a company to help Chinese manufacturers automate their operations. Changan is a wholly owned subsidiary of China South Industries Group Corp, one of the country’s largest state-owned military enterprises.

“Midea’s strategy is to be the Chinese leader in robotics and automation,” said Wang Cairong, secretary general of the China Artificial Intelligence Robot Industry Alliance, an industry guild. “It may even be a global giant in this field.”

Midea’s recent investments follow a series of government-led initiatives called China Manufacturing 2025, which is aimed at transforming China’s manufacturing industry from low-end mass production into a more profitable model harnessing technologies such as artificial intelligence and the so-called Internet of Things.

“Chinese government needs and encourages new “heavyweight” companies in this sector,” Wang said.

Midea hadn’t been alone in buying robot makers overseas.

In March, Wanfeng Technology Group, a privately owned robotics maker based in Zhejiang province, acquired 100 per cent of US industrial robot manufacturer Paslin for US$300 million.