Honeywell eyes automation division for growth in China

A production line of Honeywell International Inc in Suzhou, Jiangsu province. The company will consider China its "second headquarters" for automation and control solutions activities. LI JUNFENG/CHINA DAILY

Honeywell International Inc, the Fortune 100 diversified technology and manufacturing company, is targeting opportunities from the Chinese government's commitment to increasing energy efficiency and the safety of its workers, said Alex Ismail, the company's president and CEO of automation and control solutions.

Speaking at the recent opening of Honeywell's new plant in Nantong, Jiangsu province, which will serve as Honeywell's global glove research and development center, Ismail said: "Our goal is to grow at two to three times China's GDP growth."

He said the company will consider China its "second headquarters" for automation and control solutions activities, which will help it grow particularly in India, Russia, Turkey, Central Asia, Southeast Asia, South Africa, Brazil, Mexico and the Middle East.

Market insiders said recent China-US joint announcement for emission cuts made in November may bring about more opportunities for growth in the energy efficiency solutions business.

"The joint announcement reflects China's commitment to reducing carbon emission, and the commitment will definitely affect industries relating to energy efficiencies and benefit enterprises that offer such products and services," according to Liu Jie, analyst with Xiangcai Securities.

China's carbon dioxide emissions are expected to peak around 2030, and the country intends to increase the share of non-fossil fuels in its primary energy consumption to around 20 percent by 2030, according to the announcement.

Honeywell now generates 30 percent of its automation and control solutions revenues from China following the launch of its "East for East" solutions strategy under which the company identified a series of China-specific innovation needs.

In 2013, China became Honeywell's biggest market outside of the US for the first time after enjoying double-digit growth in revenues to $2.3 billion.

Honeywell's automation and control solution sales totaled $13.5 billion in 2013, with half coming from solutions for smart automation and controls for commercial properties and industrial facilities.

"More than 50 percent of Honeywell's products and solutions are linked to energy and energy efficiency. By immediately and comprehensively adopting existing Honeywell products the US could reduce energy consumption by 20 percent to 25 percent, and we believe China's potential in this area is even bigger," said Ismail.

When completed, the newly opened Nantong plant will be able to produce 100 million pairs of gloves annually, and the products will be sold to Europe, the US, developed countries in the Asia-Pacific region, and to the China market.

The plant will also add to Honeywell's capacity of producing personal protective equipment serving workers in fire services-related activities, and electrical safety and general industrial environments. Honeywell claims to be the world's largest provider of such products.