The GEA Group, a technology group focusing on speciality mechanical engineering, has further strengthened its presence in China by opening a new plant yesterday.

Energy Technology, an arm of the German firm, has set up the plant in Langfang near Beijing.

"By manufacturing locally, we are safeguarding our leading competitive position in the fast-growing Chinese power station business," said Peter Schenk, member of GEA's executive board.

The new plant, with an initial investment of US$12 million, consists of two manufacturing lines with an output of 75 million tons this year.

As a selling point, the new plant will churn out the Alex tube, a state-of-the-art product in the cooling sector.

Compared with conventional tubes, the Alex will help to achieve a 10 per cent increase in cooling capacity and a 10 per cent reduction in plant size. The tube has been installed in 30 power plants around the world, with eight in China.

"The new plant will not only serve Chinese enterprises, but also international ones," Schenk added. "One of the production lines is for export.'

Owing to the great potential and high growth rate, the Asian market, especially China, has become increasingly important to GEA. Its annual sales in the Asian market are around US$617 million, with 50 per cent are in China.

Statistics show that the Chinese power market will continue to add 10 per cent annually to its existing capacity until 2010.

And some 30 per cent of power plants are older than 30 years, and so need to be rebuilt or upgraded to make them more efficient.

"The huge market potential is really appealing to us, especially when growth in the US and European countries is slowing down," said Didier Pfleger, division chief operating official at GEA Energy Technology.

According to the World Factbook, China's per capita power consumption is just 1,010 kwh (kilowatt hour) every year, lagging far behind that of developed countries. "The figure in China is expected to reach 8,000 kwh, leaving much room for growth," Pfleger added.

GEA has 15 companies in China, taking some 40 per cent of market share, second only to its global competitors SPX.

"We will definitely pour more money into China, but the amount of investment will go with the market," Schenk told China Daily.

Source: China Daily