Continuing on the success trail in China

Endress+Hauser has invested around seven million euros in the site, buildings and machinery in Suzhou. The new building offers room for production, logistics and offices on 7850 square metres of floor space. Three of the Endress+Hauser Group’s production centres will move into the new premises, sharing the building and its infrastructure: Endress+Hauser GmbH+Co. KG (Maulburg, Germany), responsible for level and pressure measurement, Endress+Hauser Conducta GmbH+Co. KG (Gerlingen, Germany), which specialises in liquid analysis, and Endress+Hauser Wetzer GmbH+Co. KG (Nesselwang, Germany), centre of competence for temperature measurement technology. The three Endress+Hauser companies went into production in July 2006 with an initial staff of 24.

“We work exclusively with Chinese staff,“ explains Matthias Altendorf, Managing Director of Endress+Hauser GmbH+Co. KG, which was also responsible for building the plant. All three companies intend to expand production volume and output over time, meaning that staff numbers will increase considerably in the next few years.

The staff at the new Suzhou plant will assemble, check and calibrate measuring devices – each and every one tailored to the customer’s requirements and specifications. Endress+Hauser’s parent plants in Europe will deliver the core components. Heavy components such as pipes, rods and stainless steel flanges will be procured on the local market. “We avoid long distances and inconvenient customs formalities”, Matthias Altendorf continues. “That way, we can serve our customers in China – and later also in other Asia/Pacific countries – even better and above all much faster”. Endress+Hauser’s declared goal is to substantially expand its overall share of the Asian market in general.

“The Chinese market is vast – not only in terms of volume but also of the distances that have to be overcome,“ stresses Wilfried Meissner, Managing Director of Endress+Hauser Wetzer GmbH+Co. KG. In spite of rapid growth in recent years, China is only at the beginning of its development as far as process automation is concerned. Growth in this area is forecast to easily exceed 10 % per annum. The chemical, petrochemical, oil & gas, energy and primaries industries are important sectors. “But environmental technology, particularly water and waste water treatment, are also becoming increasingly significant,“ says Dr. Wolfgang Babel, Managing Director of Endress+Hauser Conducta GmbH+Co. KG.

For Klaus Endress, the new plant in Suzhou is part of an integrated strategy designed to promote the development of the entire company and ensure sustainable success. “We are investing in emerging markets but are also strengthening our established sites,“ emphasises the CEO. Endress+Hauser opened a new sales and service centre for the Chinese market in Shanghai last year; the Suzhou production site of flow device manufacturer Endress+Hauser Flowtec AG, inaugurated two years ago in the immediate vicinity of the new building, is currently undergoing large-scale extension work.

Endress+Hauser has been operating in China for many years. By the end of 1994, a separate sales company was established. Since then, the sales centre has grown dramatically – “by more than 30 percent annually on average”, states Managing Director Dr. Yu Guangjian, who obtained a PhD in engineering at the University of Duisburg. And there seems no end to this rapid development. “Companies continue to invest substantially in China”, Dr. Yu emphasises, “and mounting demands on quality increasingly require automation”.

In 2005, Endress+Hauser employed 240 people in China, generating approximately 50 million euros in turnover – a figure the Group plans to double by 2010. The biggest contribution to turnover is made by flow measurement technology with 41.1 % in 2005, followed by level measurement with 32.6 %. Apart from services, automation solutions are increasingly in demand, for example in the area of fieldbus networks or tank farm management. “We have gathered application experience for more than ten years and that is a great advantage,“ Dr. Yu explains with visible pride. Endress+Hauser inaugurated its new sales, service and training centre in Shanghai in July 2005. A highly motivated team serves the rapidly growing Chinese process control and automation market from this centre, with several additional sales offices located throughout the country. The building is situated in the Shanghai Zizhu Science-Based Industrial Park, a development area on the outskirts of the East Chinese metropolis that also houses universities with well over 30,000 students – fertile breeding ground for an upcoming generation of qualified engineers. Endress+Hauser has acquired a 20,000 square metre plot on this site.

The Shanghai Chemical Industry Park (SCIP), a gigantic industrial zone covering an area of 29.4 square kilometres, is located directly adjacent to Endress+Hauser’s new sales, service and training centre. The Park is set to become Asia’s most important chemical production base and the largest – and most densely populated – complex of chemical sites anywhere in the world.

The high concentration of chemical plants and power supply companies, coupled with first-class infrastructure, logistics, environmental protection and administrative services, has attracted numerous investors. Projects with a total capital in excess of 9 billion US dollars have already taken up residence in the Park. The top-ranking investors include multinational corporations like BP, BASF, Huntsmann, Bayer and Degussa. Bayer alone has spent 1.8 billion dollars to date, and with another 3.1 billion planned for the final development stage will ultimately make its biggest investment outside Germany. Degussa, too, further strengthened its commitment to the Shanghai location on September 14 with the signature of a new cooperation agreement. The company has currently reserved itself a total 400,000 square metres of SCIP floor space with an option on an additional 200,000. Of this, 160,000 square metres have already been developed. What spurred the conclusion of this latest agreement was the construction of a large, integrated production network for Plexiglas specialities and their precursor, methyl methacrylate (MMA). There are plans to build an MMA plant with an annual capacity of 100,000 tons, almost all of which will be converted into highly refined methacrylate specialities and polymers. This world-scale facility is scheduled to come on stream early in 2009. The investment volume for the next three years will add up to a few hundred million euros. Degussa sees China as one of the driving forces of global economic growth, and as such intends to increase its business in this attractive region to around 800 million euros within thirty-six months. In fiscal year 2005, some 2600 employees in China generated sales amounting to a good 320 million euros.

Drinking water production and waste water treatment represent another potentially massive sales market for Endress+Hauser products in China. Liquid analysis systems from Endress+Hauser Conducta are particularly in demand here. The Linjiang water treatment plant owned by Shanghai Waterworks Pudong Co. Ltd. and Veolia Water, situated in the south-west part of Pudong New District and hence a near neighbour of the Shanghai Raw Water Resource Company’s booster station on the banks of the River Huangpu, is a key customer in this field. The waterworks was commissioned in July 1997. The designed plant capacity is 400,000 cubic metres a day. All water treatment processes are controlled by a realtime monitoring system with PLC programming. Pudong covers an area of 533 square kilometres and has become a showcase for China in the third millennium. It is one of Asia’s main financial and business areas. One of the central future challenges here will be to improve water quality and pressure as well as the quality control system throughout the production and distribution chain. Water consumption currently stands at 1.2 million cubic metres per day in Pudong. Losses from leaks are in the order of 30 %. (ec)

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