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HomeWorldSiemens to invest $2.2 bln to increase global production

Siemens to invest $2.2 bln to increase global production

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Siemens will spend 2 billion euros ($2.16 billion) on a new global investment plan, the German engineering and technology group said on Thursday, as it gears up to meet increased demand triggered by global stimulus packages.

Siemens will build new factories, research and development centers, and training sites around the world, the company said in a statement, as it aims to tackle problems exposed by the COVID pandemic and rising geopolitical tensions.

As part of the investment program, which will cover announcements made during 2023, Siemens will spend 200 million euros on a new plant for its industrial automation division in Singapore.

“Siemens is experiencing significantly above-market growth. Today we announce an investment strategy to boost future growth, drive innovation, and increase resilience,” said Siemens Chief Executive Roland Busch in a statement.

Siemens will also increase its research and development spending by 500 million euros this year, the company said on Thursday.

The company, which employs 311,000 people, is seen as a bellwether for the health of the global industrial economy. In 2022, it increased its annual sales by 16 percent to 72 billion euros.

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“This wave of investments is supported by our record order backlog and reflects our confidence in the future,” Busch later told an event in Singapore.

The company has previously said it expects its total addressable market for its products, which range from trains to industrial software, to expand by 7 percent per year between 2022 and 2027.

The increase will be partly driven by stimulus programs, such as the Inflation Reduction Act in the United States and Europe’s Green Deal. Siemens also wants to grow faster than rivals and increase market share, Busch told analysts last month.

The investment program, which will see further investment in Europe and the United States, could also be a response to the global COVID-19 pandemic, which gummed up supply chains and logistics.

Rising tensions between Beijing and Washington have made many companies wary of their dependence on China, especially with U.S. attempts to block China’s access to the latest technology.

Busch had originally favored China as a location for the Singapore project, but he faced resistance from Siemens’s supervisory board, worried about the growing geopolitical tensions in the region, German business newspaper Wirtschaftswoche said earlier this week.

Still, on Thursday, Siemens said it was also investing 140 million euros to expand its digital factory in the Chinese city of Chengdu and build a new R&D center in Shenzhen.

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