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Siemens in Malaysia/Penang.

Dr. Gunter Wilhelm, Executive Vice President and Member of the Corporate Executive Committee of Siemens AG addressed an Asia-Pacific Press Conference held on September 4, 1996 at Penang, Malaysia. A gist of his speech highlighting the salient features is given hereunder:

At the outset he rebutted the idea that the commitments in Asia Siemens AG a German Organisation, has caused the closure of a number of plants in Germany and thus Asia was taking away jobs from Europe. He vehemently rejected the idea in saying that their employees 'generate' business which helps keep indigenous plans running.

World Electrical Market

The products of Penang and other locations are earmarked for the global market. Asia-Pacific's share of today's US$2,140 billion world electrical market has grown from 13% in 1960 to about 38% presently. Moreover, experts estimate that Asia-Pacific's market will grow 10% a year to the turn of the century. These developments will be even more dramatic in the coming decade. Within the next ten years, Asia-Pacific will comprise nearly half the world electrical market. And we are talking about enormous potential here.

Some three weeks from now on September 30, we expect to have recorded orders of some US$64 to 65 billion and sales of roughly US$60 billion. We have 380,000 employees worldwide. We can keep and build on this position only with strong growth in dynamic markets like Asia. And growth means being on the spot, working directly with local customers and partners. Our policy of local commitment in Asia has brought strong results.

Siemens in Asia 90/91-95/96

Orders in the region have surged forward 30% this year. Siemens is growing faster in Asia-Pacific than anywhere else in the world. Orders should total over US$10 billion this year. This figure includes some US$8.5 billion from consolidated companies, plus US$1.5 billion from activities that have not yet been consolidated.

Half of our business in the region comes from local value added and local procurement. Additionally, our regional procurement offices purchase products worth almost US$3 billion annually. Through close relationships with our suppliers we assure a high level of quality while strengthening local industries.

Our goal is to continue growing faster than our respective markets. This will require further investments to become an integral part of the local economies we serve.

Siemens in Asia - Growth of Orders 1991-2001

To date we have invested about US$1.5 billion in the Asia-Pacific region and will be adding another US$2 to 3 billion by the end of the century. Where exactly? Our local managers are constantly on the lookout for promising investment possibilities.

Today, some 45,000 people work for Siemens in Asia. By the year 2000 the figure should be around 70,000 and we plan some US$17 billion in business, which will represent roughly 20 per cent of our total.

When it comes to local commitment, I think we have a better record than most other companies. In many cases we have been established for well over one hundred years.

This presence means local content, centers of competence, R&D, training and education, procurement, technology transfers, joint ventures, and a deep concern for social issues and the environment. This also means achieving a better quality of life for our employees, contributing to the local and national economy, and helping the society as a whole.

At the same time, we fully integrate our local Asian activities in the worldwide Siemens network. Each plant, each office, each employee here is part of our global whole. We know that true globalization is based on local partners.

Siemens in Pakistan

In Pakistan orders were given a major boost by our contract for the Rousch Power Plant. We will build the facility in Sidhnai Barrage, Punjab Province.

The combined-cycle (GUD) unit will have a capacity of 412 megawatts and will be fired with residual furnace oil. It will be the third GUD power plant of similar capacity that we have already built in Pakistan.

The Guddu Power Plant (450 MW) went on line in 1994. Expansion of Kot Addu, a gas-turbine power plant fired like Rousch, to form a GUD Plant (450 MW) will be completed before the end of this year. Siemens is also playing a major role as consortium leader in equipping the Tarbela 3500-megawatt hydroelectric power plant.

These projects could only be managed successfully with local engineering and production in Karachi, where we manufacture transformers, diesel generation sets, motors, medium-and low-voltage switchgear, vacuum circuit breakers and motor control centers. Altogether some 1300 people work for Siemens in Pakistan.

Another project will be of immense benefit to the handicapped in Islamabad. Siemens is providing therapeutic, surgery and supportive facilities for a 300-bed hospital. State-of-the-art diagnostic tools include a magnetic resonance imaging system, cat scanners, remote-controlled and routine x-ray diagnosis, top-of-the-line ultrasonic scanners, eye, audiology and ENT diagnostic and treatment equipment, and a complete computer network for managing patient data. The hospital is expected to be open by the end of this year.

Siemens in Asia - Orders by Business Segments

We depend on all our core businesses to develop infrastructures throughout Asia. Right now, the energy segment accounts for almost one-third of Siemens' total activities in Asia, followed by communications, industry and systems engineering for large projects, electronic components, health care, transportation, lighting and information technology.

Within the last five years, we received orders for power plants in Asia-Pacific summing up to some 18,000 MW. In telecommunications, we installed over 30 million line units in the region to date. To indicate the sheer magnitude of this number, it is nearly equivalent to Germany's entire phone system!

Closing Remarks

Siemens spends some US$5 billion on promising technologies and ideas. And we are doing this vital work throughout the world. Even today, one-quarter of our 45,000 R&D people are based outside Germany. And the trend is upward.

All across Asia we are building up our R&D activities. In China, for example, cooperations with some 30 universities cover everything from curricular consultancy and leading-edge research, to telelearning projects. In Japan our corporate research laboratory has a coordinating office. In Australia, we have invested some US$50 million on R&D in recent years.

We see Asia not only as a vast and promising market, but as a valuable source of talent. We intend to develop this potential as effectively as possible. One approach is our intensive development of vocational training and management training programs. We have already founded a management training institute in Beijing, and are looking for a second site in Southeast Asia.

We think local commitment is the only way - to do business, now and in the future. And our record here in Asia certainly shows we are heading in the right direction.
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Author:Wilhelm, Gunter
Publication:Economic Review
Date:Sep 1, 1996
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