SHANGHAI -- Swedish-Swiss engineering group ABB has begun construction of a $150 million plant here to make automation equipment, eyeing the sector's growth potential in China and the rest of Asia.
The 67,000-sq.-meter facility, when completed in 2021, will replace a site that is one of the group's three global production factories.
ABB described its new plant in Shanghai as the "factory of the future where robots will make robots."
Unlike the convention linear system, production will be automated with robots moving flexibly from station to station for greater customization. It will feature cutting-edge technologies including digital twin, a feature that allows the analysis of data by bridging the physical and virtual worlds to ease production.
The factory will also host a research and development center to accelerate innovation in artificial intelligence, ABB said.
The construction of the Shanghai plant comes after a recent dip in ABB's order book for robotics in China, reflecting the group's optimistic view of the sector.
"Despite short-term market challenges, China's development as a global manufacturing hub, the ongoing trend toward mass customization and a rising shortage in skilled labor will continue to create strong and lasting demand for automation solutions in the region," Sami Atiya, head of ABB's robotics business, said on Thursday.
ABB's order book for robotics declined 14% annually to $883 million in the second quarter, partly due to weaker demand in China, the group said in a July statement. Its robotics solutions serve industries that include electronics, food and beverage, pharmaceuticals and automotive.
China is the world's largest market, churning out 133,200 units of industrial robots in 2018, according to the International Federation of Robotics in Germany, surpassing rival Japan's 52,400 units and America's 38,100 units. ABB projected that the global robotics market will grow from the current $80 billion annually to $130 billion in 2025.
"In the years ahead, we estimate the breadth and depth of our portfolio will nearly double," Atiya said.
The group has invested over $2.4 billion in China since 1992, including a $300 million manufacturing hub for electrification products in the southern city of Xiamen. The 425,000-sq.-meter site commenced operation in November.
In China, ABB competes against the likes of Siemens, which opened its first AI lab outside of Germany in Beijing in May, as the German engineering group hastened the adoption of AI-related solutions.
ABB also operates robotics factories in Sweden and the U.S.