© ABB - Page 1 JB 070411 E x t e n d e d A u t o m a t i o n S y s t e m 8 0 0 x A Automation Trends in the China Market Johan Bjorklund.

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E x t e n d e d A u t o m a t i o n S y s t e m 8 0 0 x A

Automation Trends in the China Market

Johan Bjorklund

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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

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China Economy and Growth

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%

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China Economy and Growth

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

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ABB’s mile stones in China

38 sales/service offices26 companies>10,000 employees>$2.4bn revenue (2005)>$700m investment

1907 Provided 1st steam boiler to China1974 First office for China established in Hong Kong1979 Permanent office established in Beijing1992 First manufacturing JV established1995 China holding company set up in Beijing2003 Ranked among “top 10 employers” 2005 Set up research center in

Beijing and Shanghai2006 Moved Global Robotics HQ to Shanghai

Hong Kong

Beijing

ShanghaiXi’an

Hefei

Xiamen

Chongqing

XinhuiZhongshan

Harbin

Shenyang

Dalian

Tianjin

JinanQingdao

Nanjing

Hangzhou

Fuzhou

Wuhan

NanningKunming

GuangzhouShenzhenDongguan

Ningbo

Wuxi

Taiyuan

HohhotUrumqi

Changchun

Changsha

Zhengzhou

YantaiZibo

Shijiazhuang

Hohhot

Lanzhou

Chengdu

Guiyang

Nanchang Wenzhou

Suzhou

• Datong

•

Local company Sales/service branch

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河北Hebei

新疆Xinjiang

西藏Xizang

青海Qinghai

甘肃Gansu

宁夏Ningxia

内蒙古Neimenggu

北京Beijing

黑龙江Heilongjiang

吉林Jilin

辽宁Liaoning

山东Shandong陕西

Shanxi

四川Sichuan

湖北Hubei

安徽Anhui

江苏Jiangsu

浙江Zhejiang

重庆Chongqing

云南Yunnan

贵州Guizhou

湖南Hunan

江西Jiangxi

广西Guangxi

广东Guangdong 台湾

Taiwan

海南Hainan

山西Shanxi

天津Tianjin

河南Henan

福建Fujian

ABB companies stand for quality in China

香港Hong Kong

上海Shanghai

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China DCS Industry Growth Sorted by CAGR

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China DCS Market – Chinese Suppliers

Chinese Suppliers

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DCS Market Split by Type of Supplier

30% of the market is controlled by Chinese Suppliers (including

Xinhua)

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Domestic and International Suppliers by Industry

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ZheJiang SUPCON Technology Group

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

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Hollysys

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

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Xin Hua

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

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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

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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

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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

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How to beat the Chinese Suppliers?

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

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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

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[email protected] Johan Bjorklund