SIemens set to cater to urban growth In emerging Asia

Siemens is bullish on the prospect of its newly created Infrastructure and Cities Sector in Thailand and other emerging markets, expressing confidence that low-carbon features and its financing solution will respond well to the markets' need for sustainable products despite budget limitations.Peter Loescher, president and chief executive officer of the German engineering conglomerate, said emerging markets remained the world's growth engines, based on expectation by the United Nations Conference on Trade and Development (Unctad) that growth in emerging and developing countries will continue at about 6.5 per cent per year. In particular, Asian countries with comparably low debt levels and increasing inter-region trade are driving growth."This is a competitive advantage for Siemens, as already some 30 per cent of our business volume comes from emerging economies. And cities are the very centres of the economies' growth: Experts predict cities worldwide will spend 27 trillion euros [Bt1,143 trillion] on expanding their water, power and transportation systems over the next 25 years," he said.He acknowledged that emerging markets are still poorly equipped to finance such massive investment. Dealing with this is Siemens' "Performance Contracting", an innovative financing solution to help buyers cope with budget limitations and rising energy costs. Under this scheme, customers reimburse Siemens from the ongoing guaranteed energy savings that its renovations produce."When we show how to cut energy costs by 40 per cent at no charge, customers don't hesitate. That's why we've already made 6,500 public buildings worldwide greener - enabling our customers to reduce energy costs by more than €2 billion," he said.Infrastructure and Cities, Siemens' fourth business sector launched on October 1, comprises five divisions: rail systems (rolling stock), mobility and logistics (traffic, transport and logistics management), low and medium voltage (power distribution for utilities and facilities), smart grids (intelligent power grids), and building technologies. It was created on estimates that in the coming years, the global population will surpass 7 billion and a greater number of people will want to live in cities. Today, more than half of the world's population already lives in cities, and this share is forecast to climb to 60 per cent within 20 years, an increase of 1.4 billion urban residents.Cities throughout the world will have to invest massively in expanding their infrastructures. The market for urban investments addressed by Siemens currently totals about €300 billion a year. It plans for the sector's Centres of Competence in London, Asia and the United States to conduct research for new urban solutions and tailor special packages of Siemens products.Loescher expects solid growth rates for all areas from power generation and transmission to healthcare to sustainable urban and industrial infrastructures."Climate change will make environmental technologies the leading industry of the 21st century. At Siemens, green, energyefficient solutions are already generating onethird of our total revenue. And this share is increasing every day."We see two other megatrends: shifting demographics and increasing urbanisation. That's why we have just recently added our new, fourth sector, Infrastructure and Cities. The city market is a €300billion business opportunity, andBy setting up our new sector we want to intensify our efforts in order to tap this important market and further drive growth."In line with economic expansion in Asia, Siemens has enjoyed strong growth in the region. During the first nine months of this year, the company witnessed 39percent growth in orders, and this convinced Loescher that Siemens has the right products on offer.In Thailand, the company markets a complete range of products, with a fast-increasing share of green, energy-efficient solutions. In the coming years, Siemens hopes to be involved in improving the country's infrastructure in a sustainable way, particularly with rail, water and energy solutions."In energy, we predict smart grids as a major future trend in Thailand. We've just set up a new division for smart grids - bringing together smart energy distribution and smart consumption and thus creating totally new solutions. As you know, wind-power projects are also in the pipeline."When it comes to water, our main focus is on wastewater solutions for industrial plants. The first water project we implemented, at Khon Kaen Brewery, became a reference site in Southeast Asia. And over the last couple of years, our water business in Thailand has more than doubled. We aim to further grow this business - the preconditions are very good, as we have a strong order backlog for water solutions in Thailand," he said.