Sigma Elevator Co aims to increase the annual production capacity of its factory in Dalian from 10,000 units in 2011 to 30,000 units by the end of 2013, a senior official said on Monday.
The factory, in Dalian, Liaoning province, was built in 1997 and is Sigma’s primary manufacturing and export base in the world. Elevators, escalators and moving walkways are among the things made there.
“Thirty percent of the production in the Dalian factory is for export, while the rest goes to the domestic market,” said Ken Muller, president and chief executive officer of Sigma Elevator Co, a subsidiary and a global brand under Otis Elevator Co, the world’s largest manufacturer of people-moving products.
The Sigma elevators and escalators produced in the Dalian factory are now exported to 88 countries and regions, including North Africa, the Middle East, Russia and Indonesia.
In 2005, Sigma Elevator generated $100 million in the overseas market. Three years later, it was involved in $200 million worth of overseas contracts, according to the company’s website.
To expand its factory’s production capacity, the South Korea-based company plans to increase its investments in the operation by 20 to 30 percent annually, said Nicholas Lee, a senior official who is in charge of Sigma’s business in China. Company officials declined to place an exact figure on the investment.
“China is now the world’s largest elevator market, and although the Chinese economy is slowing down a bit, there is still a lot of potential in the industry here,” Muller said.
In 2011, 406,000 elevators and 51,000 escalators were produced on the Chinese mainland.
The combined number for those products was up 25.2 percent year-on-year, according to the China Elevator Association.
By the end of 2011, more than 2 million elevators and escalators had been installed in China, making the country the world’s largest user of the equipment, statistics from the association showed.
“The number of installations in China could probably reach 10 million in the next 20 years, which gives our industry a huge potential to develop,” said Zhang Lexiang, deputy secretary-general of the association.
Sigma’s chief difficulties lie in its efforts to break into new markets. In China, it has always put a priority on ensuring its products are of a high quality, Muller said.
The increasing cost of labor in China’s manufacturing industry is also a cause of concern.
“Over the last three years, the total labor cost in the Dalian factory has increased by 30 to 35 percent cumulatively,” said Lee.