Danfoss aims to double China sales by 2021

Booming need for cold storage and transport of food increases demand for firm's tech

Danfoss, the largest industrial group in Denmark, plans to double sales in China over the next six years despite the country's economic slowdown, a senior executive has revealed.

Sales in the world's second-largest economy hit 4 billion yuan ($618 million; 542 million euros) last year, up 2 percent year-on-year.

Yet its target is to have a growth rate of 10 percent and to double its current sales volume by 2021, says Kjeld Stark, president of Danfoss China.

"The target is ambitious, but I think we can achieve that because it fits with China's agenda to improve energy efficiency and low-carbon development," he says.

China's economy grew at its slowest pace in more than two decades last year, with a target set at 6.5 percent to 7 percent in 2016.

Although some foreign companies have either withdrawn their brand or put a pause on investment plans amid a weaker economy, Stark says the Nordic company will continue its expansion plans for factories, production lines and innovation.

"China is our second 'home market' after Denmark, and we have 4,000 employees here with just four people from Denmark, so it's very clear that we will make a bigger commitment to the country," he says.

Danfoss, which provides products and services used in refrigeration, air-conditioning, energy, green buildings and engine efficiency, is in a transitional period as it tries to become more focused on areas gaining increasing priorities in China's national policies as well as in the marketplace.

"The move is in line with China's strategy to boost economic growth in the inland regions and at the same time reduce carbon emissions," Stark says.

China produces about 1 billion metric tons of perishable food each year, most of which needs to be preserved or transported in a cooled condition, and Stark adds that this provides a huge potential for growth.

Yu Xueshun, deputy secretary-general of the China Refrigeration and Air-Conditioning Industry Association, predicts that the growth rate of the cold-chain industry for fresh food is likely to increase 18 percent for the next five years.

"The demand for cold-chain transportation and preservation is growing rapidly, which means that cooling systems will be on a fast track for growth," he says, adding that 20 to 30 percent of vegetables and fruits are ruined each year due to inappropriate storage.

Danfoss has built three plants -in the cities of Tianjin, Haiyan and Anshan - while its Chinese research and development centers employ more than 400 people.

lvchang@chinadaily.com.cn

(China Daily Africa Weekly 04/15/2016 page25)