Updated: 2005-06-03
Schneider Electric has set its sights on becoming No 1 in China's building automation market. Already the world's leading provider of power distribution and industrial controls solutions, Schneider hopes to expand its business in China through partnerships with local companies, and acquisitions.

"We have very high ambitions for growth in building automation, especially in China," said Arne Frank, chairman and chief executive officer of Tour Andover Controls (TAC), a subsidiary of Schneider Electric.

"Our target is to become one of the world's top three players in building automation, with an annual revenue of US$2.5 billion. And in China, we expect to be the No 1," Senior company officials made the remarks during a technological seminar held recently in Beijing.

Schneider currently ranks fourth globally in the building automation business, which it entered through acquisitions.

Schneider acquired TAC AB in June 2003 and Andover Controls last August. Andover Controls were consolidated into the TAC subsidiary.

"Following the successful merger with TAC and Andover, our sales revenue is projected to grow 15 per cent annually over the coming few years," said Frank.

TAC, which offers building automation solutions to commercial and residential communities, hotels, hospitals, universities and government buildings, has an estimated annual revenue of US$1 billion.

Northern Europe and the United States are its two major markets, with Asia-Pacific contributing just 6 per cent of the company's global revenue. Within the region, the top three markets for TAC are Australia, Singapore and Hong Kong.

But, according to Olivier Blum of Schneider Electric (China) Investment, the Chinese mainland is TAC's fastest-growing market for building automation.

"Sales revenues from the market will grow 50 per cent this year and 100 per cent next year, as we complete the integration process of TAC and Schneider Electric in China," he said.

"Our goal is to have an annual revenue of 200 million yuan (US$24.1 million) by the end of 2008.

"To achieve that goal, TAC will build strong local competency by recruiting local managers and employees."

The company will also turn to mergers and acquisitions (M&A), which has been their global strategy for building the automation business, Blum added.

TAC last year acquired a company in Tianjin, which is its first M&A on the Chinese mainland.

Commenting on his company's strengths, Edward Keller, general manager of building automation, Schneider Electric (China) Investment, said:"We differ from our competitors in that we never compete with our partners.

"Our business is fully based on partnership, we help our partners enhance their competency."