Siemens aims to expand presence
(China Daily)
Updated: 2005-04-26 08:57

The Chinese market will become crucial for German conglomerate Siemens AG as it develops, said a top company official in China.

"I hope China will become the cornerstone, rather than a cornerstone, for Siemens in the future," said Richard Hausmann, president and CEO of Siemens China Ltd.

He told China Daily in his first interview in his current post last week in Beijing that the country's fast growth is a perfect partner for the firm's robust performance in the domestic market.

The Siemens China head said his company aims to double its sales in China "in a few years."

In the 2004 fiscal year ending in September, the German giant recorded sales of 38.4 billion yuan (US$4.64 billion) in China - year-on-year growth of 28 per cent - while orders amounted to 41.8 billion yuan (US$5.05 billion), rising by 34 per cent on the previous year.

At the same time, Siemens' global sales grew by 3 per cent as orders rose by 9 per cent.

Hausmann, who has led Siemens' operations in China since January, aims to maintain momentum.

"China is a huge opportunity for Siemens both in growth and value chain development," said Hausmann.

One of Hausmann's strategies is to extend the firm's presence in the country to cover a wider area and employ more sales people.

The German company has 42 regional offices in the country to date, but Hausmann said the number will be raised to 60. Siemens will expand from well-established and developed eastern regions to northeastern and western parts of the country.

The company will hire about 5,000 people this year, with sales positions accounting for a large portion of that number. The German giant had 31,000 employees in China by the end of last year.

China has become a centre of production and procurement for Siemens, but is also becoming increasingly important for research and development.

"One of my goals is to bring one of our global business units to China in a few years," said Hausmann, who was in charge of Siemens' most profitable medical unit before taking charge of the China business.

Siemens has formed 45 joint ventures with Chinese partners over the past 23 years, since it entered the Chinese market after the country adopted the reform and opening up policy in 1978.

Hausmann revealed his company has identified about 20 potential mergers and acquisitions in China.

Siemens is particularly interested in opportunities in Northeastern and Western China.

Siemens formed a strategic partnership with the Liaoning provincial government a month ago and will "actively participate" in the revitalization of the old industrial base, especially through restructuring State-owned enterprises.

China is expected to release licences for third generation mobile communications later this year.

The world's biggest mobile carrier China Mobile, which has more than 200 million subscribers, is soon to be granted a WCDMA (wideband code division multiple access) licence, and the world's biggest fixed line operator China Telecom and its minor competitor China Netcom are also competing for such licences.

The technology will lead to lucrative contracts for equipment suppliers to global giants Ericsson, Nokia, Motorola and NEC; and domestic firms such as Huawei and ZTE, as well as Siemens.

"We believe we will be one of the first providers of WCDMA systems in China," said Hausmann.

He said Siemens' track record, successful partnerships with Chinese operators and reliability are great advantages.

The German firm was one of the first and strongest supporters of the Chinese-led standard TD-SCDMA (time division synchronous code division multiple access).

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