September 12, 2019 / 6:17 AM / a year ago

UPDATE 1-ABB begins construction of new robotics factory in Shanghai

(Adds company comment)

By John Revill

ZURICH, Sept 12 (Reuters) - ABB has started construction of a new robotics factory in Shanghai, China, the Swiss engineering company said on Thursday, shrugging off concerns about a slowdown in the world's second-largest economy.

ABB, which competes with Japan's Fanuc Corp. and Germany's Kuka in building industrial robots used in the automotive sector among others, is spending $150 million on the site due to open in early 2021.

The company predicts the global robot sales will grow from $80 billion at present to $130 billion by 2025. China is the world's largest robotics market, buying a third of all industrial robots in 2017. At the new factory, ABB said robots will make robots.

China's second-quarter economic growth slowed to its weakest pace in at least 27 years as demand at home and abroad cooled in the face of a bruising trade war with the United States.

ABB itself recently said a slowdown from automakers in China was hitting its robotics business, with orders falling 14% during the second quarter.

Still, the company said it remained confident about the long-term potential of the Chinese market and was pressing ahead with the new factory to replace its existing factory in Shanghai.

"Despite short-term market challenges, China's development as a global manufacturing hub, the ongoing trend towards mass customization and a rising shortage in skilled labor will continue to create strong and lasting demand for automation solutions in the region," said Sami Atiya, president of ABB’s Robotics and Discrete Automation business. (Reporting by John Revill, editing by Riham Alkousaa)

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