Success spurs SW Germany's push in country

Germany-based machine tool manufacturer Schwaebische Werkzeugmaschinen GmbH, also known as SW Germany, said it will increase investment in China, including a further 5 million euros ($5.36 million) to be spent on the third phase of its factory in Suzhou, Jiangsu province, in the next three years.

SW Germany will also invest 100 million yuan ($13.7 million) to upgrade its Chongqing plant in the coming 3-5 years, the parent company's executives said.

As its performance in China has been robust over the past five years, SW Germany has long-term confidence in the nation's machine tool manufacturing market, they said.

SW Germany entered the Chinese market in 2010. Construction of its Suzhou factory's first phase started in 2016. To date, it has over 400 employees and more than 100 customers in China.

"About 35-40 percent of our global income came from China last year and we think the market here still has big potential for further growth. We expect this year's revenue of SW Asia in Suzhou to grow to 1.3 billion yuan," said Kai Pieronczyk, chief financial officer of SW Germany.

SW Asia is SW Germany's largest manufacturing and research and development unit globally.

The Chongqing and Suzhou units contributed around 1.29 billion yuan to SW Germany's total revenue last year, with the Suzhou unit alone contributing 1.18 billion yuan.

Speaking of the impact of the slowdown in new energy vehicle sales in China on SW Asia, Pieronczyk said, "Although there was a slowdown in SW Asia's revenue growth since last November because of the COVID-19 impact and the slowing NEV sector, we observed that there has been a recovery (in demand for auto parts) since July, and we expect busy production for the rest of the year."

In October, the second phase in Suzhou, built with an investment of 18 million euros and covering 20,000 square meters, started operations with an annual production capacity of 250 sets of machine tools.

Pieronczyk said:"We anticipate SW Asia's share in our global business to rebound to 40 percent by the end of this year — same as last year.

"If we see sustainable growth or very high demand, we could even go fast with the third phase extension of SW Asia."

Stefan Weber, chief technology officer of SW Germany, said, "We are stepping up efforts to support Chinese vehicle brands to go overseas."

SW Germany, Weber said, is setting up a new subsidiary in Hungary and expanding its existing one in Mexico to better serve Chinese auto players venturing abroad.

He said:"We saw an impressive growth in the Chinese market. Our customer base grew significantly with big demand for machines. We were also impressed about the capabilities of our employees in China.

"Within a short period, it became clear that the first factory was too small to serve big market needs. There is still significant market growth and there is continuous technical development in China, which we believe will further boost the need for new products. Our customers in China are looking for long-term partnerships, and so are we. Our partnerships have a very good basis for future growth."