Azbil Corporation to Expand BA Business in China Through Joint Sales Venture and Equity Participation
April 3, 2012
TOKYO, April 3, 2012 - Azbil Corporation is planning to strengthen its overseas business functions, including product development, production, sales, construction and engineering, and services, by means of equity participation and partnership with local companies, in order to expand its international business. The company announced today two initiatives to expand its Building Automation business in China: (1) establishment of a joint venture for the sale of building automation systems with a company of which the Chinese government is a shareholder; and (2) equity participation in a Chinese construction and engineering firm for light electrical equipment for buildings, which will become a subsidiary of the azbil Group.
Azbil Corporation’s two affiliates in China, Azbil Control Solutions (Shanghai) Co., Ltd. and Yamatake Environmental Control Technology (Beijing) Co., Ltd., have been developing their Building Automation business by providing HVAC control, mainly for factories and hotels built by Japanese construction companies. In recent years, the affiliates have been striving to expand into the sector of the local building market that is funded by local capital (hereafter, “the local market”).
With the Chinese government strongly promoting energy efficiency for buildings, Azbil Corporation will accelerate its business in the local market in China by means of its strength in advanced energy conservation technology. The joint venture with a local company having strong ties in the local construction market will facilitate development of the business for energy efficient renovations of existing buildings. Additionally, to enter the local market for new construction, Azbil Corporation will invest in a local construction and engineering firm.
|1.||Establishment of a joint venture with CECEP Industry Development Co., Ltd. for the sale of building automation systems
CECEP Industry Development Co., Ltd (CECEP-ID) invests in and develops industrial parks, etc. It is also a subsidiary of China Energy Conservation and Environmental Protection Group (CECEP), which is involved in an environment-related business financed by the Chinese government and is responsible for planning and implementing China's energy conservation policy. Azbil Corporation concluded a joint venture agreement with CECEP-ID. The new company will be founded in May with the name, CECEP Building Energy Management Co., Ltd. CECEP-ID will supply the chairman and the general manager, and Azbil Corporation will dispatch a vice chairman, a director, and a technical director. The joint venture will sell Azbil Corporation's building automation systems and provide energy management services for large-scale public buildings. It is aiming for annual sales of 4 billion yen in five years.
|2.||Equity participation in Beijing YTYH Intelli-Technology Company Limited
Beijing YTYH Intelli-Technology Company Limited is a leading construction and engineering firm that provides integrated design and light electrical work for intelligent buildings as well as sales of related equipment, etc. To expand its Building Automation business in China, Azbil Corporation requires qualification as a local construction and engineering company, so it has decided to invest in a qualified local company. Specifically, it will acquire 60% of Beijing YTYH Intelli-Technology Company Limited from its chairman and his wife, and make the company a member of the azbil Group. The change of the company's registration will be completed in April. Azbil Corporation will dispatch a vice chairman, two directors, and the general manager. The growth target for the business is annual sales of 5 billion yen in five years.
While sales for the Building Automation business in China in 2011 amounted to approximately 900 million yen, Azbil Corporation will proactively expand its business in China, including the measures implemented this time, to achieve its target of annual sales of 10 billion yen in five years.
Guided by the Group philosophy of human-centered automation, Azbil Corporation will continue to enhance its ability to provide customers with on-site solutions to realize safety, comfort, and fulfillment with customers.