SHANGHAI - Voith GmbH, a maker of paper, hydro-electric equipment and various other technology, plans to invest 400 million euros ($527 million) in China in the coming years, a company executive said.

The German company, one of the largest family-owned businesses in Europe, expects its number of employees in China to increase by nearly 70 percent and reach 5,000 by 2016, according to Hubert Lienhard, Voith president and CEO.

The $527-million investment will be partly financed by a loan of 2.25 billion yuan (about $357 million) that Voith sealed earlier this week with a consortium of international banks and a local bank. The loan has a maturity of five years and was coordinated by Citibank (China) with the help of Voith Finance GmbH, which is owned by Voith Group. The banks, Commerzbank AG and HSBC Holdings PLC, are acting as the lead arrangers in the deal, and Australia and New Zealand Banking Group Ltd, the Industrial and Commercial Bank of China Ltd and Standard Chartered Bank are acting as the original lenders.

The transaction marks the Voith Group's first financing deal in the Chinese market. Hermann Jung, Voith CFO, said the loan will provide Voith with flexible and long-term liquidity and underlines the growing importance of the Chinese market for the future development of the company.

The new line of credit will help Voith strengthen its presence in China, in part by expanding Voith Paper City, a producer of paper-making machines, in Kunshan, Jiangsu province, the company said.

"I think this is a fantastic step ahead for Voith to become a 'local' Chinese company here," Lienhard said in an exclusive interview with China Daily. "And we will continue to work on more local products."

Voith has four chief business divisions - hydro, paper, turbo and industrial services - and makes machines for various industries. The Chinese government has identified renewable energy, resource protection and transport as priorities to be pursued during the country's 12th Five-Year Plan (2011-15). Voith said the plan will open "excellent" opportunities for the company in the businesses of energy, raw materials, transport, automobiles and paper.

"I'm absolutely convinced that China will not have a financial or economic crisis," Lienhard said.

He said China's economy will be bolstered by strong domestic investment and growth that comes from sources other than exports. "And we have the right products to participate in that growth."

Voith has sold much of the equipment used in various large projects in China, including in the Three Gorges Dam on the Yangtze River and in high-speed railway lines.

Voith had about 1 billion euros in sales in China in its latest fiscal year, running from September 2010 to September 2011. That accounted for about 18 percent of its global sales.

The company said it plans to increase that ratio to 25 percent during the next five years.