Change es­sen­tial

Oil gi­ant’s for­mer chief says China’s big­gest oil firms must down­size and boost ef­fi­ciency.

China Daily (Hong Kong) - - FRONT PAGE - By YANG ZIMAN yangz­i­man@chi­

Emer­son, a global tech­nol­ogy and en­gi­neer­ing com­pany based in St. Louis, Mis­souri of the United States, sees good op­por­tu­ni­ties in China’s in­dus­trial au­toma­tion and en­ergy ef­fi­ciency sec­tors, ac­cord­ing to its top ex­ec­u­tive.

“In China, we’ ll be fo­cus­ing on au­toma­tion and a higher level of pro­duc­tion qual­ity, such as what’s needed in the phar­ma­ceu­ti­cal in­dus­try and other process-driven man­u­fac­tur­ing in­dus­tries, which are ex­pected to be big driv­ers for our long-term growth in China,” said David Farr, Emer­son’s chief ex­ec­u­tive of­fi­cer.

Farr listed four ar­eas as hav­ing great po­ten­tial for the com­pany’s growth in China.

First is the com­mer­cial and res­i­den­tial so­lu­tions busi­ness where Emer­son has a pres­ence in the form of its re­frig­er­a­tion, air con­di­tion­ing and heat­ing prod­ucts.

“We have more ef­fi­cient and cleaner prod­ucts that go in to home heat­ing. Our heat pump tech­nol­ogy takes out coal­fired heat­ing and re­places it with elec­tri­cal heat­ing. This kind of tech­no­log­i­cal change is sup­ported by the Chi­nese govern­ment,” said Farr.

Sec­ond is the area of “cold chain”, for food re­frig­er­a­tion where Emer­son works with food pro­ces­sors, dis­trib­u­tors and re­tail­ers in China to help them re­duce food wastage and safe­guard food qual­ity.

Third is the phar­ma­ceu­ti­cal in­dus­try where Emer­son of­fers con­trol sys­tems and au­toma­tion equip­ment to help Chi­nese com­pa­nies make drugs.

Fourth is the area of clean power gen­er­a­tion equip­ment. “In to­day’s world, what we see is a big fo­cus on en­ergy ef­fi­ciency, sus­tain­abil­ity and en­vi­ron­men­tal is­sues around the world. So, we re­di­rect a lot of re­sources along those lines,” said Farr.

This year so far, Emer­son’s net global sales, in­clud­ing sales from dis­con­tin­ued oper- ations, reached $20.2 bil­lion, with China con­tribut­ing around 10 per­cent of it, same as in 2015.

“We’ve been here for close to 35 years, and some­times the econ­omy goes up and some­times it goes down, but we’re very pos­i­tive about the Chi­nese econ­omy,” said Farr.

Since 2002, China has been Emer­son’s sec­ond largest mar­ket next to the US.

“We are cur­rently in­vest­ing over $30 mil­lion in China to deepen our ca­pa­bil­i­ties, up­grade and au­to­mate our pro­duc­tion lines and ac­com­mo­date fu­ture growth,” said Farr.

In Au­gust, Emer­son agreed to buy Pen­tair’s valves and con­trols busi­ness for $3.15 bil­lion in cash, broad­en­ing its fo­cus on in­dus­trial au­toma­tion.

The Pen­tair unit, based in Schaffhausen, Switzer­land, serves cus­tomers across the chem­i­cal, power gen­er­a­tion, min­ing and oil and gas in­dus­tries.

Farr said that one of his top pri­or­i­ties in China is to ex­pand the Pen­tair busi­ness. “We will be work­ing to achieve a suc­cess­ful trans­for­ma­tion of the Pen­tair busi­ness in China and take that busi­ness to a whole other, higher level of abil­ity to en­gi­neer, pro­duce and sup­port for the Chi­nese mar­ket,” said Farr.

David Farr, Emer­son’s chief ex­ec­u­tive of­fi­cer

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