FANUC increases investment to expand China factory

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This rendering of the new FANUC Shanghai factory illustrates the modern facility | Photo Credit: FANUC

Japanese robot maker FANUC is investing 26 billion yen ($240 million) into the expansion of its Shanghai, China plant. The company plans to expand the Shanghai facility five-fold over the next three years, through a joint venture that is operated with local player Shanghai Electric Group. The new project covers an area of ​​about 431 acres, with a construction area of ​​300,000 square meters. The new facility will deploy the latest manufacturing processes, including machine learning, digital and collaborative solutions.

As recently as 2019, FANUC was the robotics market leader in China with a 12% market share, according to research firm MIR. All of the competitors in China are gearing up to expand their business, including competitors ABB (11% market share) and Yaskawa (8% market share). There are also a number of Chinese robot companies that are growing quickly and threatening FANUC’s dominance in China. The investment by FANUC is a response to the market opportunity and the threats by these competitors. More than 140,000 robots were installed in China in 2019

The 2020 IFR world robotic installations report shows China as the largest market for robots, worldwide.

FANUC Chairman Yoshiharu Inaba said: “With the rapid development of China’s economy and the increasing demand for automation in various industries, Shanghai FANUC’s robotics and intelligent machinery businesses have also developed by leaps and bounds. FANUC’s headquarters will go all out to support Shanghai FANUC. In order to provide Chinese users with reliable and cost-effective products and fast and thoughtful after-sales service. I firmly believe that as China’s manufacturing industry continues to grow, Shanghai FANUC will become the leader in robotic automation and continue to grow steadily. ”

FANUC plans to continue to manufacture the core of its robotic arms at its headquarters in the Yamanashi Prefecture village of Oshino. FANUC will complete the assembly of the robotic arms within China and configure them for specific customer applications.

The competition heats up

The competition for the automation market is growing in China. ABB announced it will open a new $150 million, 67,000 m2 factory in Kangqiao, near Shanghai this year.  Yaskawa is building a new plant next to an existing one in Jiangsu Province with a nearly $50 million investment. It is scheduled to begin production in fiscal 2022. The Midea Group, a Chinese appliance maker, acquired Germany-based industrial robot manufacturer Kuka in 2017.

Beijing is placing its own bets for the growth of domestic robotics vendors. The current, combined market share of domestic automation vendors is between 30% and 40%. Beijing would like to see that market share for local players grow to 70% by 2025.

Takeaways

By all accounts, the automation market in China is the largest in the world. FANUC is currently the market leader in China and hopes to continue this dominance by investing in a new, local facility that will enable it to drive down costs and improve its ability to deliver as needed to remain on top of the China market.

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This content was originally published HERE

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