With almost all manufacturing facilities in China having reached saturation point, ABB, the world's leading power and automation technology provider, plans to expand its existing bases.

The Switzerland-based giant announced 10 days ago it will invest US$10 million to expand its existing drive system factory in Beijing.

The new facility will be completed in the second half of next year.

The firm moved its office in Shanghai to a larger building in May as a result of increased business volume in the Yangtze River Delta.

Two new plants, with one for transformers in Pudong and another for electrical machinery in Minhang, will be put into operation soon.

Veli-Matti Reinikkala, senior vice-president of ABB China, said it will soon double the capacity of its motor factor in Shanghai. More new facilities in Xiamen, in the meantime, will be on the agenda for expansion.

A power technology research and development (R&D) centre, the firm's first R&D centre in China, is also under construction.

With the centre, ABB will be able to reinforce its co-operation with Chinese universities.

Although Reinikkala declined to reveal the scale of investment, he said the R&D centre will not only serve the local market, but also will play an important role in the firm's global business.

"ABB will invest several tens of million of US dollars in China next year," said the vice-president.

Company statistics indicate, ABB's revenues in China hit US$2 billion last year, up 20 per cent year-on-year. "At least 10 per cent growth can be achieved this year," Reinikkala predicted.

China is ABB's third largest market, after the United States and Germany. The country will be the No 2 market for ABB in the years to come. The Chinese branch's revenues account for 10 per cent its global business, he said.

He attributed the rapid growth to China's booming economy. The company's industry division directly benefits from the growth of China's gross domestic product.

In addition, ABB sees huge business opportunities in China's effort to build more power plants and grids. "ABB can provide technology-intensified products and services to reduce the power loss on power transmission and distribution," Reinikkala said.

He added the firm has won three orders from the Three Gorges project worth of US$1 billion.

"We look forward to winning more orders from it," Reinikkala said.

ABB has its eye on a variety of customers apart from such large State-owned projects, he said.

"We aim to strengthen our brand image as a high quality and fast service firm," Reinikkala said.

Currently, most of ABB's product lines have been introduced to China, and the localization rate of most products has reached 90 per cent, while the engineering part has even reached 100 per cent.

The products are not only provided to the Chinese market, but also exported to neighbouring countries, and the United States.

The firm will enlarge its export volume with the expansion of the manufacturing facilities in the next couple of years, according to Reinikkala.

As the world's largest supplier of electric automation system, ABB is finding that domestic demand for highly-efficient motors and drives is increasing rapidly.

In the past, Reinikkala said, customers only looked at the price of the products, ignoring how much energy the motors or drives could save during operation.

"Such a situation is changing, but more efforts is required to cultivate the market," he said.

Furthermore, the marine business, which entered China three years ago, is proceeding smoothly, and Reinikkala is optimistic about the future of the division.

ABB won the bidding to complete the Yantai-Dalian train-ferry project in May, beating many strong international firms, including German multinational giant Siemens.

ABB's marine division will provide its propulsion power solution, Azipod, to two ferries, which will link the railway, on the Bohai Sea, from Yantai, a city in East China's Shandong Province, to Dalian, in Northeast China's Liaoning Province.

ABB established its representative office in Beijing in 1979, and opened its China headquarters in the city in 1994. The company's investment in China has reached US$600 million in the past 10 years, launching 20 joint ventures and solely-funded ventures and 22 sales outlets with 5,500 employees.