ABB sets sights on 'designed in China'

An ABB robot used at Great Wall Motors Co Ltd's Tianjin plant. ABB is the first and only company to localize its robotics manufacturing in China. [Photo / China Daily]

Von Grunberg identifies servicing innovations as a key profit driver

Hubertus von Grunberg suddenly got up and walked around the table holding his black electronic device.

He pointed to some tiny words on the back of the tablet computer and said excitedly: "Here everybody can see a symbolic phrase.

"It says 'Designed in USA, assembled in China', " which "has a lot to do with how our company thinks about China differently from what's being done here. This is not what we pursue and it will not work in the future", said the 70-year-old chairman of the board of directors of Swedish-Swiss power and automation technology giant ABB Group.

"ABB is targeting an approach of 'Designed in China and made in China'. Chinese homemade products, which we produce here, are also increasingly designed, invented and patented here by our high-quality Chinese engineers. And these products are increasingly sold worldwide," said Von Grunberg.

Since it first supplied a steam boiler to China in 1907 and invested in its first joint venture in Xiamen, Fujian province, in 1992, ABB has established a full range of business activities in China, including research and development, supply chain management, engineering, manufacturing, sales and services. It has 18,300 employees, 35 local companies and an extensive sales and service network across 80 cities.

It has also established itself as a dominant presence in China's fast-growing power transmission market, with total revenue in China of $5.1 billion in 2011. As much as 85 percent of its revenues are derived from its locally made products.

While implementing its "In China, For China" strategy, the company is now also expanding its goal of bringing products made and designed in China to the world, making China one of its core global markets and manufacturing bases. The blueprint has enabled ABB China to export to more than 40 countries and regions, achieving export growth of more than 50 percent in 2011 year-on-year.

Under the new strategy, with its focus on exports, Beijing-based ABB High Voltage Switchgear Co, which was established in 1995, has performed strongly in overseas markets. The company has exported more than 1,000 high-voltage circuit breakers to more than 20 countries and regions.

"We are proud of our high-tech leadership - we are second to none - in the premium segment (of the market) globally. Now we are moving into the mid-segment where Chinese products will play a very important role," said Von Grunberg, indicating the potential of the designed-in-China products.

"This mid-segment market has been developed in China and some other emerging markets. We therefore focus first on bringing the products to the Chinese market. As a next step we see if these products can be also interesting for other markets including Europe and the United States," added Claudio Facchin, president of ABB North Asia and China.