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Siemens ready to establish business center in Taiwan

The chairman of Siemens AG yesterday announced an imminent expansion of activities in Taiwan, including the establishment of a business center designed to consolidate the position of German companies in Taiwan within two years.

The move is designed to increase procurement from Taiwan from NT$40 billion (US$1.2 billion) this year to NT$50 billion (US$1.45 billion) next year.

"Our business activities here in Taiwan have generated revenue of US$500 million this year and we are expecting a figure between US$500 million and US$700 million for next year," said Karl Hermann Baumann, chairman of the supervisory board of Siemens AG, at a meeting with Premier Yu Shyi-kun.

The chairman of the Munich-based company said that the business center, to be located in the Neihu district of Taipei will serve as a base for Germany's small and medium-sized businesses to expand in the region.

With the project still in the planning stage, he declined to disclose investment figures, but said the center will house Siemens' Taiwan headquarters and the offices of the German representative office in Taiwan, the German Institute.

Siemens, which began operations in Taiwan in 1970, has purchased around US$1.2 billion this year from Taiwan's electronics suppliers, including notebook computers, cellphones, motherboards and servers. The figure represents about 1.5 percent of Taiwan's total electronics exports.

Baumann yesterday also made a commitment to continue to expand procurement with the figure for procurement expected to range between US$1.45 billion and US$1.56 billion for the next two years.

Yesterday's announcement comes as Siemens eyes several large infrastructure projects in Taiwan, including Taiwan Power Co's (Taipower) Tatan Power Plant and its north-south power distribution and transmission projects, as well as the Taipei MRT extension.

With a total investment of NT$122.7 billion, the power plant project has attracted major companies, including General Electric Co, Mitsubishi and Siemens to bid on its NT$60 billion equipment contract. The government is expected to name the chosen contractor by next May.

Taipower also plans to spend NT$454.3 billion on a project, to be completed by 2006, to develop the nation's power distribution and transmission.

Baumann said yesterday that government policies pose obstacles to companies bidding on infrastructure contracts by requiring that they allocate 20 percent of their total investment to purchase their materials in the domestic market and transfer technology to Taiwan businesses.

In addition, he said, in the north-south distribution project, the government had combined three areas of the project -- construction, cables and equipment -- into one contract and Siemens, a power generator equipment supplier, was having difficulty finding local partners for its bid.

"We would like to ask the government to reconsider these policies for us to participate in these projects," he said.

In response, Premier Yu Shyi-kun said that the government cannot intervene in the bidding process, but would "re-examine its policies governing participation by all international corporations in Taiwan's development."
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