Thu, May 26, 2022

perspective

Invented in Germany, then made in China


Germany is one of the top destinations for China’s investment in Europe and the latest jewel in its crown is Kuka, an engineering company and one of Germany’s greatest innovators, which was acquired by Midea.

At more than US$5 billion (Bt174 billion), Kuka represents the largest Chinese takeover of a German company and highlights the direction China is taking. 
Kuka developed one of the world’s first industrial robots and continues to be a global leader in the industry, with shares of 35 per cent in the North American robotics and automation market, 46 per cent in Europe and 19 per cent in Asia. 
Kuka robots are used by leading global manufacturers in high-end industries such 
as Audi and BMW cars, 
Boeing aircraft and 
Northrop Grumman 
military equipment. 
Kuka is also the inventor of the Iiwa, or intelligent industrial work assistant, which can pour a beer or brew a cup of coffee, among other tasks.
Midea, Kuka’s new parent, is one of China’s largest home-appliance makers with a sizeable global presence, as it exports around one-third of its production. 
Like many other Chinese companies, Midea faces rising labour costs and needs to manage this through increasing automation. 
Already Midea employs around 100 Kuka robots in its factories.
As well as automating its plants, the acquisition of Kuka will help Midea improve its facilities and produce its own robots, automation equipment and smart-home devices.
This strategy fits well with China’s goal of becoming a more advanced industrial society using innovation and smart technology. 
China is the largest and fastest-growing market for industrial robotics, accounting for around 30 per cent of the global market for industrial robots. 
And by 2020, it plans to reach 150 robot units per 10,000 workers. 
Midea is not the only Chinese company investing in innovative German companies. 
In the first half of this year, Chinese investors acquired 37 German companies worth $10.8 billion. 
Indeed, nearly 40 per cent of all inbound investment in Germany in that period came from China. 
Other top investments were in EEW Energy from Waste; Hanwha Q Cells, a technology company; KrausMaffei, a machinery group; and Putzmeister Holding, a construction company.
At the recent G20 meeting in Hangzhou, German leader Angela Merkel stood next to Chinese President Xi Jinping in the official photo. 
Although this was due to protocol, it nicely seemed to symbolise the importance of this close relationship. 
Germany will host the next summit in Hamburg in 2017. We look forward to seeing how things will have developed by then.

Published : October 09, 2016

By : Suwatchai Songwanich <br /> Chief executive Officer, <br /> Bangkok Bank (China)