XIAMEN: France-based Areva's transmission and distribution (T&D) arm has announced it plans to spend 50 million euros (US$63 million) in the next three years to double its manufacturing capacity in China.

Areva T&D, one of the world's top three electricity transmission and distribution businesses, which also include ABB and Siemens, aims to double sales to 500 million euros (US$630 million) by 2009, Philippe Guillemot, CEO of Areva T&D, told China Daily on Friday in the city of Xiamen, in East China's Fujian Province.

"China is among the world's most competitive markets," Guillemot said.

The country now represents 20 per cent of the global market in T&D product sales, totalling 24 billion euros (US$30.2 billion), Guillemot said. "But with the fast growth of the Chinese market, the proportion is expected to further increase to 25 per cent within three years."

The company will seek opportunities to increase its production plants in China. Currently it has seven such facilities in Beijing, Shanghai, Xiamen, and Suzhou of Jiangsu Province.

The new ventures will include both greenfield ones and existing plants in which Areva expects to buy a stake, said Arnaud de Bourayne, president of Areva (Group) China.

The Areva group set up its T&D division in 2004 by taking over Alstom T&D to diversify its business portfolio, which previously focused on nuclear energy development.

Areva T&D announced the official opening of two new factories in Xiamen, which have a combined investment of 10 million euros (US$12.6 million).

The two plants produce vacuum interrupters and switchgears for the domestic electricity equipment market.

The Xiamen vacuum interrupter venture last year achieved revenue of 170 million yuan (US$21.3 million), which is expected to almost double to 300 million yuan (US$37.5 million) this year, said Sher Hock Guan, a board member of the Xiamen-based firm.

To meet increasing demand, Areva plans to further expand the Xiamen plant capacity during the second phase of the development, Guillemot told a press briefing on Friday, without elaborating further.

Two other new factories for the production of GIS (gas installation substations) and disconnectors (equipment used in electricity grid construction) are also being developed at Suzhou near Shanghai, Arnaud de Bourayne disclosed.

Another Areva official who did not want to be named told China Daily that the company is also planning to build a third factory to produce instrument transformers, without specifying the location.

As the nation speeds up its efforts to improve the electricity distribution network, Guillemot said they expected to gain more market share by providing products and transferring technology.

Source: China Daily