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Automation Trends in the China Market

Automation Trends in the China Market. Johan Bjorklund. Johan Bjorklund. Started in ABB 1996 as trainee Half a year in China 1997 1997-2001 Västerås, Product Management 1997-2001 2001-2003 Singapore as Technical Sales Support

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Automation Trends in the China Market

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  1. Automation Trends in the China Market Johan Bjorklund

  2. Johan Bjorklund • Started in ABB 1996 as trainee • Half a year in China 1997 • 1997-2001 Västerås, Product Management 1997-2001 • 2001-2003 Singapore as Technical Sales Support • 2003-2005 China, Shanghai as Area Sales Manager North East Asia and Technical Sales Support • 2005- China, Beijing as Area Sales Manager North East Asia and Technical Sales Support

  3. Total Economy About 10% GDP growth the last 10 years FDI About 60 BUSD Per Year Outgoing FDI 2004: $5.7 billion 2005: $12 billion 2015: $25-30 billion Sweden Bio Fuel in Sveg (2 BSEK) Market Place in Kalmar (1 BSEK) Engergy Efficient Paper Making Center in Karlstad Huawei About 100 people in Kista Compounded Annual Growth Rate from 2001-2006 Refining 32.3% Oil & Gas 18.7% Petrochemical 41.4% Power 24.5% China Economy and Growth

  4. Stocks Shanghai Stock Exchange Bubble Real Estate Has cooled down a little bit since tax regulations RMB Value / Trade Surplus Pork Pork prices 43% up since last year Telecom China Mobile gets about 6 Million Subscribers every month Beijing 60 000 new cars every month China Economy and Growth

  5. Harbin Changchun Shenyang Urumqi Dalian Lanzhou Hohhot Hohhot Beijing Taiyuan Shijia zhuang Yantai Tianjin • Datong Zibo Qingdao Jinan Zhengzhou Nanjing Xi’an Hefei Shanghai Wuxi Suzhou Wuhan Chengdu Hangzhou Ningbo Nanchang Wenzhou Chongqing Fuzhou Changsha Guiyang Xiamen Guangzhou Dongguan Shenzhen Kunming Nanning Hong Kong Xinhui Zhongshan ABB’s mile stones in China 1907 Provided 1st steam boiler to China 1974 First office for China established in Hong Kong 1979 Permanent office established in Beijing 1992 First manufacturing JV established 1995 China holding company set up in Beijing 2003 Ranked among “top 10 employers” 2005 Set up research center in Beijing and Shanghai 2006 Moved Global Robotics HQ to Shanghai 38 sales/service offices 26 companies >10,000 employees >$2.4bn revenue (2005) >$700m investment • Local company • Sales/service branch

  6. ABB companies stand for quality in China 黑龙江 Heilongjiang 吉林 Jilin 辽宁 Liaoning 甘肃 Gansu 内蒙古 Neimenggu 新疆 Xinjiang 北京 Beijing 河北 Hebei 天津 Tianjin 山西 Shanxi 宁夏 Ningxia 青海 Qinghai 山东 Shandong 陕西 Shanxi 西藏 Xizang 河南 Henan 江苏 Jiangsu 四川 Sichuan 安徽 Anhui 上海 Shanghai 湖北 Hubei 浙江 Zhejiang 重庆 Chongqing 江西 Jiangxi 湖南 Hunan 福建 Fujian 贵州 Guizhou 云南 Yunnan 广东 Guangdong 广西 Guangxi 台湾 Taiwan 香港 Hong Kong 海南 Hainan

  7. China DCS Industry Growth Sorted by CAGR

  8. China DCS Market – Chinese Suppliers Chinese Suppliers

  9. DCS Market Split by Type of Supplier 30% of the market is controlled by Chinese Suppliers (including Xinhua)

  10. Domestic and International Suppliers by Industry

  11. Founded in 1993 Based on ZheJiang 1200 employees 700 million contract amount, 2004 7 subsidiary companies 12 filial companies 3000 customers 30 Cities in China SINOPEC PETROCHINA ShouGang Group Bao Steel South Africa East South Asia Industry area Steel Oil & Chemical Electric power Active in Fairs in the US, India and Pakistan ZheJiang SUPCON Technology Group

  12. Originally a department of the Sixth Research Institute of the Ministry of China Information Industry Founded in March 1993 Now has become a group of several corporations including Hollysys Automation, Hollysys Information Technology, Hollysys Electric Technology, etc. 600 Employees (200 Engineers) 1500+ Successful Projects http://www.hollysys.com Has the goal to be listed in the US Nuclear Power Technology Hollysys

  13. Full Name - Shanghai Xin Hua Control Technology (Group) Co., Ltd Found in Shanghai, Feb.1985 through a collective effort from DEH (Digital electro-hydraulic system) community led by concerned authority Started with DEH & MEH product development for Power Plant application Biggest DEH manufacture in the world Extended to DCS business Biggest local DCS vendor in China Headquarter based in Shanghai and consists of 12 daughter companies Sales in 2003: RMB 630M (US$ 76M) Utility Business Bought by General Electric 2004 The remainder of the company have developed a new DCS Xin Hua

  14. Where are the Chinese Supplier’s Today? • Low to Medium end DCS Market • Strongest in Power, Chemical, Cement • Basic Technology • They have started to adopt new technology • They get helped by the fact that there is a trend towards more commodity technology

  15. EPCs and End User expands internationally • The Chinese Suppliers are following the EPCs’ and End Users’ expansion outside China • They have good relations and experience • Cement • SINOMA invests in Middle East • Oil & Gas • PetroChina, SINOPEC and CNOOC are investing in Central Asia and Africa • Power • China finances Power Plants in India and South East Asia • Suppliers are following the Chinese Boiler Suppliers Chinese Suppliers are very strong when following their EPCs and End Customers abroad

  16. Strengths of the Chinese Suppliers • Large Domestic Market • They can learn on their home land • They have the latest technology in all fields • Low Cost Labor • Growing from simpler products to more advanced • China is also trying to move from pure labor low cost labor jobs to higher added value jobs • Hungry “employees” • Preferred by government

  17. Industry Know-how Utilize the broad and long experience Advanced Technology and Applications Move towards the higher end of the value chain Advanced Foreign Technology and good Quality Suppliers can get a premium price Cost Focus You need to have cost focus in order to beat the competition Localization To better understand the market To lower the cost To take advantage of the local talent How to beat the Chinese Suppliers?

  18. Trends in China • Environmental Protection • Sustainable Energy Sources - Wind and Solar Energy • Bio Fuel • Water & Waste Water Treatment • CO2 Emission Reduction • Energy Efficiency • China needs to increase the efficiency of its power generation and distribution since it is already building the generation capacity of UK every year • Safety • To prevent Coal Mines accidents • To prevent Chemical and Petrochemical Accidents • CFDA Regulations (Pharmaceutical and Food) • Productivity • Optimization of production

  19. Johan Bjorklund Johan.bjorklund@cn.abb.com

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