China powering Danish Danfoss

Danfoss Group, one of the largest industrial companies in Denmark, said on Wednesday that its revenue from the Chinese market will grow to 5 billion yuan ($790 million) in 2011 and the will become its largest market by 2015.

“China is the third-largest market for Danfoss, which provides 12 to 15 percent of our global revenue. We are very interested and confident in this region and will try to make it our No 1 market within four years,” Niels Bjoern Christiansen, president and CEO of Danfoss, said during the 15th anniversary ceremony of the establishment of Danfoss China.

“We are extremely interested in conducting business in the eight cities, including Beijing and Shenzhen, which are regarded as the pilot cities by the central government in terms of energy conservation and emission reduction. We will also step up our efforts to tap opportunities in China’s second- and third-tier cities, especially in the western region, ” Niels said.

Danfoss, which, among other things, produces electrical components for several industries, recently set up a new research and development laboratory in Wuqing, Tianjin, and it is planning to expand its production line in Haiyan, Zhejiang province, in the near future, according to Niels.

“Unlike many foreign companies which mainly focus on developing the high-end market, we noticed that there is a huge demand in the mid- and low-end market in China. We are also planning to tap the potentials in these areas,” said Thomas Koniordos, president of Danfoss China.

“We will expand our businesses through direct investment, setting up joint venture with local companies and mergers and acquisitions, mainly by investing directly,” Niels said.

He also said the group’s growth in the Chinese market is driven more by the development in the market, rather than taking largest market shares from competitors.

“Encouraged by the Chinese central government, China is moving very fast toward green economic growth, and it is progressing even faster than the United States. The market of energy efficiency is endowed with great potential in China, and that’s why we decided to develop China as our second home market,” he said.

Last year, Danfoss reported revenues of $5.6 billion, and expects a repeat performance with China as its driving force. Niels said.

In November 2009, the government announced its intention to reduce the intensity of carbon dioxide emissions by 40 to 45 percent by 2020 compared with the level in 2005.

Tax breaks for renewable-energy companies have been introduced as well as increased prices for electricity produced from cleaner fuels.

“According to the 12th Five-Year Plan (2011-2015), a change of economic development model has been emphasized, and the country attaches great importance to building up an energy-saving and environmentally friendly society, which will encourage enterprises to focus on energy conservation and emission reduction,” said Niels.

“The plan is also in accordance with our business. We specialize in providing energy-efficient solutions to our customers,” Niels said.

He said the plan can help China to realize its energy-efficiency target.

“For example, it has taken a long time to implement energy-saving heating solutions in Chinese households. The plan will help further the implementation of some green actions like this,” he said.


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