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Danfoss buys a Chinese drives-maker

01 January, 2006

Danfoss has bought a Chinese manufacturer of low-cost frequency converters with the aim of entering a sector of the Chinese drives market which is growing by around 25% a year. Until now, Danfoss has not been active in this low-end sector, which represents about 30% of the total Chinese drives market.

The acquisition of Zhejiang Haili Electronic Technology - known as Holip - is Danfoss` first in China. The deal is in line with Danfoss` aim of making China its "second home market", says the company`s chief executive, Jørgen Clausen. "It will speed up the Danfoss frequency converter business in the Chinese market," he adds, and is "a perfect match for the Danfoss Motion Controls business in China".

Holip, founded in 2001, employs about 200 people at its site about 100km from Shanghai. It will keep its existing management and will continue to sell its frequency converters under the Holip name via its established sales network.

Danfoss already has two factories in China where it employs 1,000 people and generates sales worth around €106m.

The Finnish drives-maker Vacon has moved to a larger factory in Suzhou, China, less than a year after it started to produce AC drives at the site. Vacon says that it has transferred Vacon Suzhou Drives to the new 5,000m2+ site in response to the growing demand for its products in the Far East. The company is also enlarging the production area at its headquarters plant in Vaasa, Finland.




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