ABB, a leader in power and automation technologies, is expected to set up a research and development center to serve its businesses in China as well as neighboring countries.

"It will be part of ABB's development strategy in the Chinese market which is crucial to us," said Paul Chan, senior vice-president of ABB (China) Ltd.

ABB was used to letting enterprises in China do research themselves, but present practices were not keeping up with market demand.

"We have put the center plan on the agenda," Chan said last week at the opening ceremony of ABB's new offices in Shanghai.

With a center, ABB would be able to reinforce its co-operation with Chinese universities, he said.

China now has become ABB's third largest market, after the United States and Germany. But Chan says China will be the No 2 market for ABB in the years to come.

He told China Daily that the company's orders and sales in China are growing fast. Last year, it obtained orders valued at US$1.6 billion.

However, he said, nearly all of ABB's manufacturing facilities in China have reached saturation point and are in urgent need of expansion.

"We are considering a further investment plan to expand the existing manufacturing facilities by injecting additional investment," he said.

ABB's investment reached US$600 million in the past 10 years, launching 20 joint ventures and sole-funded ventures.

Two new plants, with one for transformers in Pudong and another for electrical machinery in Minhang, will be put into operation soon with a combined investment of US$57.5 million.

"ABB has grown fast into a US$1.6 billion business in China," said Peter Leupp, chairman and president of ABB in China.

"To better support our ever-expanding list of power and automation customers, we decided to expand our operations in Shanghai."

Leupp said ABB's strategy for Shanghai, home to the world's more foreign direct investment, has long been to support both multinational and local customers.

"It has also helped the Chinese Government develop infrastructure along the Yangtze corridor, particularly with regard to the Three Gorges power project," he said.

According to Chan, a power project using US$340 million worth of ABB equipment has a 3,000 megawatt capable of supplying annual electricity to at least 1 million households in Shanghai.

Another project costing ABB US$360 million in equipment will be put into service in June to solve electricity shortages in Guangdong Province.

He said ABB will continue setting up joint ventures by co-operating with local partners rather than purchase bankrupt Chinese enterprises.

"Efforts are being made to seek cooperation opportunities with Shanghai Electric Group," Chan said.

(China Daily May 31, 2004)