– by Alexander Huebner and Fanny Potkin
Munich/Singapore (Reuters) – In view of the raging demand, Siemens wants to expand its production for two billion euros.
“That’s more than double what we’ve invested together in the past two years,” said CEO Roland Busch on Thursday in Singapore, where the technology group wants to build a third plant for its successful control technology for machines and systems. “This wave of investment is supported by our record order backlog and reflects our confidence,” said Busch. Siemens is sitting on orders worth 105 billion euros. With the factory in Singapore, Siemens wants to serve the needs of Southeast Asia. Further investments in the USA and Europe are to follow in the coming months.
In the corona pandemic, it has proven itself to organize production locally, said Busch. At that time it was shown that one was “too dependent on certain countries”. Reducing this dependency stuck in the mind. “It has less to do with geopolitical tensions,” he dismissed the suspicion that Siemens was turning away from China with its decision in favor of Singapore, where a factory for “Simatic” control technology has been located in Chengdu for ten years. “We have a high market share in China that we want to defend and expand. At the same time, we are diversifying and thus increasing our resilience.” The United States and Europe are increasingly critical of China’s political ambitions and economic policies.
Busch does not expect the boom to end, on the contrary. “We are currently seeing very good growth in all areas and want to accelerate again,” he told the “Handelsblatt”. Siemens is currently reviewing its planning, which envisages growth of five to seven percent in the medium term.
CHINA SHOULD NOT COME SHORT
The new plant in Singapore will cost 200 million euros and create 400 jobs. At the same time, the existing factory in Chengdu is to be expanded for 140 million euros in order to meet the demand from China. Siemens is also promising 400 new jobs there. According to Busch, Siemens is benefiting from the fact that factories are being built in many places as part of government economic stimulus programs and the development of new technologies. “But fewer and fewer people want to work in factories,” added Cedrik Neike, board member responsible for the Digital Industries automation division. A new research and development center is to be built in Shenzhen, also in China.
Siemens has allocated around half of the two billion euros to specific projects, around one billion is still outstanding. Busch indicated that investments should also be made in the USA and Europe. And the building technology division SI (Smart Infrastructure) will not be neglected either. Siemens had already announced an investment of 220 million dollars for a plant in Lexington, North Carolina, for the Mobility train division.
The group intends to spend around six billion euros on research and development (R&D) in the current financial year (as of the end of September), half a billion more than in 2021/22. The focus is on artificial intelligence (AI) and the virtual networking of industry, the so-called industrial metaverse.
(Report by Alexander Hübner and Fanny Potkin; collaboration: John Revill in Zurich; edited by Ralf Banser; If you have any questions, please contact our editorial team at [email protected] (for politics and the economy) or frankfurt.newsroom@thomsonreuters .com (for companies and markets).)
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