INDUSTRIAL engineering firm Thyssenkrupp AG targets to book around $50 million to $100 million in revenues from its Philippine operations this year, banking on the government’s infrastructure program to boost the demand for the company’s services.
The German firm recently said it looks to serve local firms expanding cement plants and power capacity to support the “Build, Build, Build” program under President Rodrigo R. Duterte’s administration. The company’s target revenues for the year would be a three-fold increase from around $30 million it generated in 2017.
“The gross potential of the Philippines is a striking positive for us… There’s cement and chemical plants, and we deliver other products here as well. We have decided that we will give a visible signal to our customers,” Thyssenkrupp Chief Executive Office Heinrich Hiesinger said in a media roundtable in Taguig City on March 27.
Thyssenkrupp is a global firm that employs around 159,000 employees across 2,000 sites in 79 countries. It operates in five segments, namely components technology, elevator technology, industrial solutions, materials services, and steel.
Since 2011, Mr. Hiesinger said Thyssenkrupp has been increasing the share of industrial goods and services to its operations in Asia, while reducing the share of the steel business.
“We decided that (steel) does not allow us to harvest the growth potential in Asia and other booming countries. And therefore we have decided that we will significantly shrink our share of steel production and significantly push for our industrial goods and service business,” Mr. Hiesinger said.
Strengthening its industrial goods and services segment will also allow it to participate in the country’s infrastructure program, particularly with the expected increase in demand for cement. Citing figures from the Board of Investments, Thyssenkrupp said that demand for cement will double to 40 million metric tons by 2020.
“We will really start where we have our strengths. One of the booming areas right now is cement, driven by ‘Build, Build, Build’ (program). This is our heritage, we are one of the global players in cement,” Mr. Hiesinger said.
The company is also looking at striking deals for power plants.
“This is the next area where we will go forward, whether it’s for large power plants, this is a strength of ours and clearly we go on in service, and we would offer our customers the opportunity that we would take over the entire operation and maintenance and lift up the output of those equipment,” Mr. Hiesinger said.
The Thyssenkrupp executive said the company prefers to go into partnerships with local firms for cement plants and decentralized power plants. Here, Thyssenkrupp will provide the engineering and material handling aspect of a project, while the local partner will take care of construction.
“For us, it’s helpful because they know all the details of the country. And it’s also getting the acceptance for the project,” Mr. Hiesinger said. — Arra B. Francia