Siemens can become best partner for construction of Belt & Road Initiative, Siemens China CEO

Lothar Herrmann, president & CEO at Siemens China

Siemens has seen great commercial potential from the Belt and Road Initiative. It is believed that Siemens could be the best partner for the construction of the Belt and Road Initiative, according to Lothar Herrmann, president & CEO at Siemens China, in a recently exclusive interview with Xinhua.

Since the Belt and Road Initiative was proposed in 2013, many transnational companies have participated in the Belt and Road construction, of which Siemens is one of the representative firms.

--- Highly recognizing the concept of the Belt and Road Initiative

Herrmann said that Belt and Road Initiative has not only become a “hot word” in this era, but actually supported the growth of global trade, and provided strong impetus for the development of globalization.

Statistics released by China’s Ministry of Commerce (MOC) showed that from January to November of 2017, Chinese enterprises signed 7,217 foreign contracting projects in countries along the Belt and Road routes, with newly-signed contracts reaching 144.32 billion U.S. dollars, up 14.5 percent year on year.

Siemens highly recognizes the concept of the Belt and Road Initiative, Herrmann said.

As of the end of 2017, Siemens had cooperated with over one hundred of Chinese EPC enterprises, including China Energy Engineering Corporation Limited, Power Construction Corporation of China, China National Petroleum Corporation, Sinopec Group, and China National Building Materials Group Corporation in the fields of electric power, oil and gas, chemical engineering, and mining industries.

In the fiscal year 2017 (from October 1, 2016 to September 30 of 2017), Siemens’ total operating revenue in China reached 7.2 billion euros. In the three fiscal years from 2014 to 2017, Siemens’ total turnover in China increased by 12 percent.

---Setting up special agency to actively join in Belt & Road construction

In March 2018, Siemens established its global Belt & Road office in Beijing. As part of Siemens' global working mechanism, the office is responsible for integrating internal and external resources, implementing strategies of Siemens based on the Belt & Road Initiative, and giving full support to the Initiative.

“Global management team of Siemens has been attaching great importance on how to participate in the Belt & Road construction more actively," said Herrmann, adding that on the one hand, Siemens will continue to strengthen cooperation with the Chinese enterprises to jointly build the Belt and Road, and on the other hand, the company hopes to make use of its global operations to find projects and opportunities in countries and regions along the Belt & Road routes and invite the Chinese enterprises to work together.

Herrmann said that Siemens will hold the Belt & Road international cooperation forum in Beijing in June this year. More than 800 political and business representatives from countries and regions along the routes will be invited to discuss how to strengthen cooperation through innovation and digital technologies and how to help these countries and regions to achieve sustainable development.

--- From "technical cooperation" to "financial cooperation"

In recent years, more and more overseas project owners have raised the requirement for EPC enterprises to “bring funds outwards while going global”.

Siemens understands projects better than other financial institutions and understands finance more than engineering companies. By arranging equity investment, project loans, export credits and providing financing consulting services, Siemens has the ability to help the EPC projects complete financing, and realize the extension from "technical cooperation" to "financial cooperation", said Herrmann.

For example, Siemens and China National Machinery Import & Export Corporation (CMC) cooperated to build the second phase of the Bangladesh Sirajganj combined-cycle power station. Siemens helped the project to successfully obtain the guarantee of Euler Hermes, an export credit insurance company in Germany. Thanks to the joint guarantee by the China Export & Credit Insurance Corporation (Sinosure) and Euler Hermes, the project finally obtained loans from a consortium consisting of Standard Chartered Bank, Siemens Bank, etc., according to Herrmann.

He said that in the process of jointly building the Belt and Road Initiative, Siemens is willing to establish in-depth partnerships, meaning that the enterprise is not only a supplier, but also a co-explorer undertaking risks and sharing success.

Founded in 1847 and headquartered in Germany, Siemens is a global leader in electrification, automation and digital technology. Siemens currently has over 32,000 employees in China and is one of the largest foreign-invested companies in the country.