Italy and Germany may be far from China, but companies in both are welcoming partnerships with Chinese firms for industrial automation.
The market for robotics in heavy industry will continue to grow at 6.19 percent from now through 2020, predicts Research and Markets.
Much of that growth will occur in China, which hopes to improve its “robot density” to maintain its manufacturing dominance. To that end, Chinese companies such as AGIC Capital have sought partners in Europe and elsewhere.
Chinese capital invested in Italian robotics supplier
AGIC Capital is spending €100 million ($113 million) to acquire a majority stake in Gimatic SRL, which makes end-of-arm tools for robotic arms.
Italy-based Gimatic supplies actuators, grippers, sensors, and plastic injection-molding equipment to the automotive, electronics, food, and pharmaceuticals industries. It has more than 100 patents and facilities worldwide, and its revenue has grown by more than 20 percent over the past three years.
“AGIC’s investment will support Gimatic’s internationalization and expansion in Asia, especially in China,” said China-based AGIC.
“Its significant growth potential is underpinned by a seismic shift in global manufacturing towards industrial automation and robotics, with the market set to more than double in size over the next five years,” said Heiko von Desitz, AGIC’s managing partner in Munich, Germany. “This is being fueled in large part by Asia’s growth in industrial infrastructure developments, fast-growing economies, higher manual labor costs, and increased focus on driving efficiency gains.”
Italy was the top destination in Europe for Chinese investment last year, according to the Financial Times.
Henry Cai, a former chairman of corporate finance at Deutsche Bank, founded AGIC Capital in March 2015. The $1 billion fund is intended to invest in Industry 4.0 partnerships between Asia and Europe.
In January, AGIC Capital partnered with China National Chemical Corp. (ChemChina) and Guoxin International Investment Corp. in acquiring KraussMaffei Group from Onex Corp. for €925 million ($1.045 billion). It was the largest investment to date by a Chinese company in a German one.
Munich-based KraussMaffei produces linear, industrial, and side-removal robots, as well as injection-molding and reaction-process machinery. It supplies the plastics and rubber-processing industry.
Cemtrex picks up Periscope
Cemtrex Inc. has spent €9 million ($10.16 million) to acquire Periscope GmbH, which makes electronics for Tier 1 suppliers to the automotive industry.
Germany-based Periscope‘s annual revenue is expected to be around €30 million ($33.87 million).
Farmingdale, N.Y.-based Cemtrex manufactures custom electronics and environmental sensors, and provides industrial contracting services. It has another electronics subsidiary in Germany and will rebrand Periscope as ROB Cemtrex.
Cemtrex expects to participate in “disruptive technologies” reshaping the automotive industry, such as electric vehicles and self-driving cars.
“We expect to be at the forefront as the automotive industry transforms due to new disruptive technologies,” said CEO Saager Govil. “The €30 million revenue contribution that we anticipate from Periscope combined with our existing operations pushes the company over $100 million in total sales over the next 12 months.”
Midea purchase of KUKA hits opposition
Not every intercontinental deal has gone so smoothly, though. German authorities may not approve Midea Group Co.’s plan to acquire KUKA Robotics AG, which is valued at €4.6 billion ($5.2 billion).
“Kuka is a successful company in a strategic sector that is of key importance for the digital future of European industry,” said Gunther Oettinger, European digital economy commissioner.
KUKA supplies robots to Tesla Motors Inc., which makes electric cars and is developing autonomous driving features.
Chinese companies have been looking to invest in foreign firms as they adopt more industrial automation, but some European observers are wary of losing capabilities and control.
“We have to watch out that there’s no China bashing going on,” said Sigmar Gabriel, German minister of energy and economy, “but I would be very pleased if there was an alternative offer based in Germany or Europe, to give shareholders that option.”
As Chancellor Angela Merkel visits China this week, Berlin later denied that it would block the purchase.
“If we had been interested, we would have acted on it some time ago,” said Siemens CEO Joe Kaeser.
It’s too soon to say whether KUKA’s board of directors will approve Midea’s offer, said Hubert Leinhard, CEO of Voith GmbH, a major shareholder of the German robotics company.
In the meantime, Voith is selling its industrial services group to Triton Advisers Ltd. for an undisclosed amount. Both companies are based in Germany.
Voith supplies the automotive, energy, and paper industries, among others. It will retain 20 percent of the group. Triton invests in midsize businesses in Northern Europe.
Foxconn buys and builds robots
In addition, Foxconn could be in the market for a robotics manufacturer, partly to scale up production of Pepper.