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Friday, May 14, 2010

Siemens plans global hubs in India, China

With steel production increasing in India and China, Siemens VAI, the German engineering and plant-building company, has drawn up plans to make the two countries a hub for its growth in the future.

In its fourth media summit on metals and mining technologies in Essen, Germany, Siemens unveiled plans to invest €35 million in India and China over the next two to three years. The company wants to expand its local production, engineering and project handling.

India and China will be global hub for Siemens VAI for design, engineering and development of local products and solutions, partnering with local customers, own manufacturing, global sales, among others.

Werner Auer, CEO, Siemens VAI, said, “In India, we will be concentrating on selected raw steel production technologies, whereas China will be responsible for new developments in the field of rolling.”

Auer said India and China will be responsible for the worldwide marketing of Siemens VAI’s products that meet the new and specific market requirements.

Siemens believes that as India and China produces over half of the world’s steel and with the Asian market expected to grow 10% annually, India and China is where the future growth of the company lies.

Auer said, “Since the economic crisis the competition in the plant engineering has intensified significantly. Chinese and Indian companies are bringing their own plants to the market successfully and even more frequently.”

According to Siemens, Indian companies are able to offer steel plants at 40% lesser than its European counterparts. To cut the competition, Siemens wants to project itself as a local company and wants to focus on local requirements with standard solutions.

Under its strategy to localise itself, Siemens will give the responsibility to develop, design, engineer to order, production, project handling, commissioning and service of total of 11 plant components of the steel industry, to India and China. Auer said, “We are putting the business responsibility where it originates and where it can and should grow.”

He said countries in Europe, the US and Japan are continuing to focus on the efficiency and flexibility of their production process, whereas India and China want to produce, above all else, steel with simpler and cheaper plants.

Auer said almost half of the company’s €21 billion investments are already being used in such low-cost plants.

Siemens sees growth in the Indian market coming from upstream products such as billet caster, ladle furnace, vacuum degassing, blast furnace and sinter plant, all critical in steel manufacturing.
Tim Dawidowsky, general manager, casting and rolling, said that the emerging markets, especially India and China, will be the strongest growth drivers for the company.

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