Power transmission equipment under installation at Huaneng Power International Inc's Jining station, in Shandong province. Roland Berger's report says the power transmission and distribution equipment manufacturing industry in China will maintain stable growth to reach 320 billion yuan by 2015. [Photo / China Daily]

An example of this is ABB's recently established company Winride Switchgear Co Ltd, which independently researches and develops switches in line with the mid-segment demand of the local market.

"We establish a technology center that takes a look at the requirements of the customers and then design these new products to fit these processes. And once the product is developed, we launch that new enterprise. We will see more such opportunities," said Facchin.

"But China is not only for the mid-segment. Being strong in the mid-segment in making affordable products allows ABB also to have the investment to become a technology leader through innovation," said Von Grunberg.

The fast development of its robotics business is a good example of the success of ABB's R&D localization strategy, marking the evolution of "Made in China" into "Designed in China".

ABB was the first and only company to localize its robotics manufacturing in China. It has focused on the localization of robotics R&D since 2005, when it established the group's third robotics R&D facility in China, following facilities in Sweden and Norway. Since its inception, the local robotics R&D team has increased in size by 10 times. Seeing the huge potential and great importance of the China market, the company moved its robotics global headquarters from Detroit to Shanghai in 2006.

In 2009, the local team developed the world's fastest and most accurate six-axis robot as well as ABB's first core robotics product designed in China. This robot model also introduced locally developed robotics products and technology to the global market.

Last year it added a compact four-axis robot, the world's fastest robot for high-speed end-of-line palletizing, to its designed-in-China list.

"I am a firm believer in the economic future of this country and I think our future will be determined by what happens in China in the next 10 years," said Von Grunberg. "So it is very important to watch very closely what's going on here to learn and to adapt and to make the most of it by developing, designing, manufacturing and exporting and so forth."

According to a recent report released by German consulting firm Roland Berger, the power transmission and distribution equipment manufacturing industry in China will maintain stable growth until 2015, when it will reach 320 billion yuan ($50.11 billion), an all-time high.

Meanwhile, the market will develop with the following features: The percentage of industrial clients will increase steadily, making it the next market focus. Equipment such as smart grids, and protection and control systems will be the new growth sectors. And there will be huge growth space for China's ultra-high voltage equipment and medium voltage switchgear markets - all in line with ABB's advantages in the local market.

The report also points out four "megatrends" of the industry in China: Smart, integration, systemization and overseas expansion, which indicates Chinese companies will need to expand overseas in consideration of the emerging opportunities there, the saturation of the China market and the issue of overcapacity.

However, Von Grunberg also said that the explosive growth of China's economy requires ever-increasing amounts of energy.

"The best way of getting more energy at low cost without environmental impact is energy efficiency, which is smart grids, is energy conservation, avoiding waste, intelligent control of the flow of energy, eliminating all the losses, as most of the energy is still lost in unnecessary processes. One of the prominent examples is that people always use uncontrolled motors instead of speed controlled electrical motors," said Von Grunberg.

ABB's motors and drives, observing the highest energy efficiency standards in the world, generate solid business for the company and help customers cut energy consumption. In China, with only the motors and drives delivered to customers in the past 14 years, ABB was able to save 138 billion kilowatt/hours of electricity, which is enough to satisfy the power needs of 1.94 billion people for one year (based on the power consumption level of Beijing residents in 2010).

During its recent annual Automation World event in Shanghai, ABB showcased its energy efficiency solutions for various industries, customized renewable energy solutions for wind and solar power, and many other automation technologies, solutions and services, under the theme of Industrial Upgrade and Service.

"ABB is committed to supporting the industrial upgrade of its Chinese customers by improving their energy efficiency, automation penetration and productivity," said Facchin. "ABB has comprehensive offerings and a proven track record for the automation of the manufacturing and process industries in China."

China's 12th Five-Year Plan (2011-15) calls for a migration from a resource-intensive economy to a high-efficiency and low-carbon-based economy. Industrial upgrading, mostly realized through automation, is playing a key role in the process.

ABB's energy-efficient solutions have supported many projects throughout China. In 2012, ABB provided Majialiang coal mine in Shanxi province with two sets of mine-hoist systems, the largest of their kind in China, helping improve operational efficiency while reducing shutdown time by 70 percent and energy consumption by 28.4 percent.

An ABB multi-drive solution for Huaxin Cement - China's oldest cement company whose products were used in the Three Gorges and Danjiangkou dams - is saving 1.6 million kwh of electricity a year on a conveyor application at the company's showcase production plant in Hubei province.

Industrial upgrading depends not only on automation penetration but also advanced service. As a global leader of power and automation technologies, ABB offers a series of advanced service concepts and solutions, from traditional maintenance to a full service, to help customers achieve the best value-added asset management.

"For us, service is extremely important in our 2011-15 strategy, and it takes first place in increasing customer satisfaction because, if you make sure that you serve the products that you have installed, you can more easily guarantee that they function, as well as improving customer satisfaction," said Von Grunberg.

He added: "Closeness to customers helps us to sell the next stage of the product. Service itself can be a profitable business and service can carry over slumps in production."

lifangfang@chinadaily.com.cn