New Locations in the Middle Kingdom
GF has been doing business in China for nearly 30 years and has continuously expanded its market presence there. The company’s success story in the Chinese market began with a subsidiary of GF Piping Systems in 1993 and is continuing in 2021 with the construction of new, cutting- edge production sites for all three divisions.
China has developed into an industrialized country at breathtaking speed, with the country’s gross domestic product growing by an average of 11.3 percent per annum since 1978. Even in 2020, the year of the coronavirus pandemic, China was the only major economy worldwide to increase its GDP – by 2.3 percent to an incredible USD 15.4 trillion. Switzerland’s GDP, by comparison, dropped by 2.9 percent over the same period. The hub of China’s boom is the metropolitan region of Shanghai, the world’s largest transshipment center. GF’s Asian headquarters is located there, with further GF subsidiaries from all divisions in the surrounding megacities. In addition, GF has a successful partnership with the Lingyun Group. The common joint venture Chinaust celebrated its twentieth anniversary in 2020.
CHINA BY NUMBERS
China is an attractive market for all three GF divisions due to its size and dynamic economic growth. The country’s rapid recovery from the coronavirus crisis is also enhancing the positive strategic outlook.
billion people lived in cities in China in 2020. This figure puts China at the top of the world’s population charts once again, slightly ahead of India.
of the global gross domestic product was produced by China in 2020. By comparison, Switzerland achieved a value of 0.48 percent in 2020.
Potential for GF
China offers future growth potential for all GF divisions: GF Piping Systems could produce piping systems for millions of people in the utility, energy, and industrial segments. There are also opportunities for GF Casting Solutions, because China accounts for about one-third of all cars sold worldwide, with a rising trend. Finally, China accounts for about one-third of the global machine tool market, opening up growth possibilities for GF Machining Solutions.
Additional sites for GF’s key market
China is the key market for the three GF divisions that have been gradually growing their businesses there since 1993. GF has more than 3’100 employees in the country – almost as many as in Switzerland. China has a key role to play in the GF Strategy 2025, which aims to increase GF’s sales to CHF 5 billion by 2025. Over 30 percent of these sales are expected to take place in Asia, and a majority of them in China.
GF is currently building two new production sites in the country. GF Machining Solutions built a new plant for milling machines in Changzhou, northwest of Shanghai, at the end of 2018, and the other divisions are following suit. GF Casting Solutions is currently building a high-pressure die casting plant for structural parts in Shenyang, a city in northeast China. The plant is scheduled to begin operations in winter 2021/2022, and the division chose this region to be close to customers including BMW and Volvo that have production facilities here. Customer expectations were also a key factor. “Their sustainability targets on CO2 reduction are growing across the whole logistics supply chain,” says Mujia Zhang, Head of Business Unit China GF Casting Solutions and Delegate of the CEO in China. “Therefore customers largely prefer the geographic adjacency of suppliers during the nomination process for new projects.” Above all, GF is benefiting from China’s booming e-mobility market. In addition to solutions for electric drive trains, the GF Casting Solutions offering includes lightweight structural parts that reduce the weight of electric cars while increasing their range. There were more than 1.34 million new registrations for electric and plug-in hybrid cars in China in 2020, a figure equal to that of the entire European market.
© GF
© GFNew super plant in Yangzhou
GF Piping Systems has been producing high-quality piping systems in China since 1998. At the end of 2020, the division began construction work on a “super plant” in Yangzhou, about three hours’ drive from Shanghai. The latest technology will be used here to produce innovative products such as automated valves, which GF Piping Systems aims to use to capture more segments on China’s growing markets, specifically in the areas of industrial wastewater treatment and water quality monitoring.
GF MILESTONES IN CHINA
1994: The country’s first GF Machining Solutions location, the Beijing Agie Charmillles, goes into operation.
1997: GF Piping Systems founds the division’s first Chinese location in Pudong, a district of Shanghai.
2000: The Chinaust joint venture is set up on the basis of the successful cooperation between GF and the Lingyun Group, and today includes 12 companies.
2005: GF Casting Solutions establishes a plant for aluminum and magnesium die-casting in Suzhou, a booming city in the Shanghai region.
Constant growth is also the name of the game for GF’s largest division in China. “We want to boost our growth by focusing on high-quality solutions for process automation, especially in the areas of industrial wastewater treatment and monitoring water quality,” says Michael Toh, Head of Business Unit Asia at GF Piping Systems. By setting up its new locations, GF has paved the way for all divisions to take their next steps toward sustainable growth in China.
State-of-the-Art and Sustainable
© GFGF Piping Systems aims to become a competitive player in China’s municipal sewage treatment market by means of innovative products. Featuring modern manufacturing lines, open offices, and clean rooms, the new Yangzhou production site will enable the division to locally develop and produce pipes, fittings, and instrumentation for industrial and building technology applications. The goals here are to generate growth, satisfy customer needs, and contribute to a more sustainable way of life by reducing water loss. A variety of ecologically friendly and energy- saving technologies are used in the new plant: high insulation wall and roof panels, low power consumption and noise reduction engines, solar energy, and geothermal heat pump air-conditioning. The new plant also utilizes what’s known as the “sponge city” concept, which imitates the natural water cycle by retaining large parts of the rainwater.
- Division: GF Piping Systems
- Location: Yangzhou
- Groundbreaking: September 2020
- Planned inauguration: Spring 2022
- Size: 46’600 m²
- Workspace: for ~130 employees
WOW FACTOR
The new building will feature a leisure area for employees to make the working environment interesting and lively.
MODERN PRODUCTION
The Yangzhou location has 17 extrusion production lines and 30 injection molding production lines, as well as high-end assembly workshops, clean rooms, and automated storage centers.
© private“It is challenging to build this high-quality plant in alignment with GF’s long-term business strategy in a very dynamic Chinese market. But this project shows me what teamwork can achieve. The passion, support, and care we have among our multicultural team motivates us every day.”
George Yang, Head of Supply Chain China and Project Manager of the Yangzhou plant
Products for the Mobility of the Future
© GF With its new Shenyang plant, GF Casting Solutions will be producing closer to its customers and gain growth in the Asian market. It focuses on lightweight solutions for wellknown manufacturers such as BMW and Volvo. It provides modern workplaces for employees in production, maintenance and supporting functions such as sales, purchasing and HR. About 25 percent of the division’s Chinese workforce will work in Shenyang once it has been inaugurated. The new site strengthens GF Casting Solutions‘ R&D competences, which stretch across the entire manufacturing process from initial concept design to series production. From day one, the plant was designed according to the latest sustainability standards, for example with regard to energy efficiency in the manufacturing process or the use of renewable energy. The facility also complies with LEED requirements. This is the leading global certification for sustainable construction and manufacturing, including water recycling and heat treatment.
- Division: GF Casting Solutions
- Location: Shenyang
- Groundbreaking: July 2020
- Planned inauguration: April 2022
- Size: 17’962 m²
- Workspace: for ~150 employees
WOW FACTOR
The project is running right on schedule despite the impact of both the COVID‑19 pandemic and the winter shutdown in northern China.
THE FIRST PRODUCT
in Shenyang will be a magnesium cross car beam for the BMW G18 (X5 SUV). Production start will be in 2022.
© private“In 2013, I joined GF as Head of Maintenance in Suzhou. Employee training at the company and its continuous improvement of technology attracted me to it. I like both innovation and challenges. The project to build our brand new factory in Shenyang involves both. I enjoyed it very much.“
Xiang Wu, Project Manager of the new Shenyang plant
New Plant, New Records
© GFSince 2009, GF Machining Solutions has been producing milling machines in Changzhou. After the new production plant had been inaugurated at the end of 2019, the division reached a record number of order intakes in 2020 despite the pandemic. The new plant has a capacity of 700 sets of milling machines per year. Sustainability is a key topic at the Changzhou plant: LED light is saving electricity and a rainwater pool is used to reduce water consumption, just to offer two examples. For China, the Strategy 2025 of GF Machining Solutions focuses more and more on developing advanced manufacturing solutions for all key segments, from aerospace to medical to ICT/electronics and, of course, new energy vehicles within the automotive sector. The contribution of GF Machining Solutions China to the GF Strategy 2025 is expected to be significant in terms of growth and profit.
- Division: GF Machining Solutions
- Location: Changzhou
- Groundbreaking: September 2018
- Inauguration: End of 2019
- Size: 51’550 m²
- Workspace: for ~165 employees
WOW FACTOR
Changzhou is one of the division’s two Application Centers in China. In late 2020, the 3’000th milling machine was delivered from Changzhou.
70%
of the milling machines produced in Changzhou in 2020 were sold in China.
© private“I have spent 11 years at GF Machining Solutions in Changzhou, starting out as an Electrical Assembly Worker. I was promoted several times due to good performance and achievement. Fairness, transparency and ownership are our core principles. We count on team spirit and good execution to strengthen our competitiveness.”
Feng Yan, Vice Production Manager