CEO says ABB supporting China’s goals

"For example, we are setting up more and more businesses in the West," said Kindle during a media roundtable in Beijing. "And we are creating new power and automation technologies to help China achieve its goal to be a resource-efficient society."

Kindle said ABB just started a new $30 million turbocharging business in Jiangjin, near Chongqing, which will contribute to China's goal to become the world's largest shipbuilding nation. "We now have two important ventures in Xian and two in Chongqing, including new sales offices dotting the West in places like Hohhot and Urumqi to support China's Go West initiative," said Kindle. "In coming weeks, we plan to start the process for two more ventures, also in the West, so you can see we are clearly committed to China moving forward."

During his remarks, Kindle also outlined some of the energy-efficient technologies ABB offers to the China market. "We built three of the high-voltage direct current links running power from the West to East of China. Each link provides power to about six million households and saves about 78 MW by avoiding losses - equivalent to a power supply for 156,000 households. That means we save enough power for around half a million households in China."

In addition, Kindle talked about ABB's energy-saving motors and drives. "In the past ten years, drives for controlling the speed of pumps and fans alone are estimated to have reduced electricity consumption by about 50,000 GWh per year worldwide," he said.

According to recent analysis, this has saved 10,000 GWh of power for customers in China in the last ten years - which is the equivalent to two years of power output from a nuclear power plant.

"And motors account for 65 percent of industrial energy consumption. Saving even just a few percent of energy on a motor, which is possible with the most efficient products, means 150 million KWh of power is saved for Chinese customers every year.

Fred Kindle took over as CEO of the ABB Group in January 2005. His predecessor, Juergen Dormann (currently chairman), visited China in October 2004, to outline the company's 5-point plan for China. "We remain on target for ABB in China to double orders to around $4 billion by 2008, overtaking the U.S. as ABB's largest market," said Kindle, before offering an overview:

1: Organic growth. ABB has historically achieved double-digit growth rates in China, and expects to grow 20 percent per year until at least 2008. Kindle said ABB is on target for 2005.

2: New investments. ABB has invested more than $600 million in China and plans to invest at least $100 million starting new product lines and factories in China in the run-up to 2008. Kindle cited the aforementioned $30 million investment in a turbocharging joint venture as an example.

3: Cost migration. ABB has a special team buying materials locally and using them to build complete product lines, rather than importing certain components from Europe as it has often done in the past. Coupled with using China as a base for global sourcing, there is an obvious cost advantage. The new robotics business, based in Shanghai, exemplifies moving from high cost to high productivity markets, said Kindle.

4: New research and development center in Beijing. Kindle provided a brief update: the center opened on March 30, and now employs around 35 people, working on power and automation projects, with a particular eye toward mechatronics and ultra-high voltage technology.

5: Developing local talent. An important part in ABB's five-point plan, it involves hiring an additional 5,000 employees - highly talented and well educated - in the run-up to 2008. ABB has hired more than 1,000 people this year, putting the company ahead of its goal to have 12,000 in total by 2008.

In closing, Kindle mentioned several important corporate social responsibility initiatives, like ABB's recent $100,000 donation to China Poverty Alleviation Fund. The donation will be used to support poverty-stricken university students. ABB also makes available scholarships for students in cities like Xiamen, Shanghai, Beijing and Chongqing.

ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impacts. The ABB Group of companies operates in around 100 countries and employs about 103,000 people worldwide. ABB has a full range of business activities in China, including manufacturing, R&D, sales and service, with 8,000 employees, 24 joint ventures and wholly owned companies, and an extensive sales and service network across 30 cities. To know more about ABB, visit www.abb.com.cn.