2007-01-26 - Michel Demare, chief financial officer of ABB Ltd., believes there are many investment opportunities in Taiwan's power industry, especially in the areas of electric power network, reliability and management, and high-voltage direct current (HVDC) transmission.
By William C. Pao
January 23, 2007, The China Post
Page 12 Business
There are many investment opportunities in Taiwan's power industry, especially in the areas of electric power network reliability and management and high-voltage direct current (HVDC) transmission, or distribution of electricity underground or undersea, said Michel Demare, chief financial officer of ABB Ltd., one of the world's leading power and automation solutions providers.
The CFO of Zurich, Switzerland-based company made the remarks while attending a meeting in Taipei last week.
ABB was founded as a result of a merger between Sweden's Asea and Switzerland's BBC Brown Boveri in 1988. Both companies were founded in the late 19th century and had developed core competency and know-how in the areas of power distribution and industry automation.
Industries served by ABB include automotive, semiconductors and 3C, petrochemical, marine, metal, and electric utilities. The company operates in five specific areas, namely power products, power systems, automation products, process automation, and robotics. It specializes in T&D, or transformation and distribution of power, as well as automation solutions that are heavily used by semiconductor firms and other industrial plants. ABB ranks among top 3 in all industries mentioned. The company last year generated a net income of US$735 million, sales of US$22.4 billions, a remarkable achievement considering the company had incurred a net loss of US$35 million in 2004. ABB was able to make the handsome profit last year thanks to its restructuring effort, Demare said.
"As a result of our restructuring effort, we were able to cut expenses by US$1.2 billion annually," he said.
The company has a heavy presence in the United States, Europe and Asia, especially China and India, whose economies are growing at a rapid pace and are in heavy need of electricity. Here in Taiwan, ABB works with Taiwan Power Co. and other firms industry firms to contribute its technology and know-how to Taiwanese enterprises.
Working for a leader in electric power network management and reliability and HVDC solutions, Demare believes Taiwan has a lot of potential in these areas.
HVDC refers to a specific way of distributing power, whereby electricity is transmitted within large cables that are buried underground or undersea, instead of over conventional power lines. In Demare's words, HVDC is already common in Europe, where nations are connected by a network of undersea or underground power lines to ensure energy-sharing, which reduces the occurrences of blackouts or power outages.
HVDC is especially ideal in Taiwan given the island is subject to lots of natural disasters such as earthquakes and typhoons, which often cause serious damage to conventional power lines. With HVDC, Taiwan can still be power-sufficient in the event of a natural or man-made disaster, thanks to the series of undersea or underground cables carrying power from either local or overseas generators, Demare said.
Taiwan currently operates three nuclear power plants, and a fourth one is under construction in Kungliao, Taipei County. The construction of the fourth plant has caused great concerns among environmentalists and is opposed by the ruling Democratic Progressive Party.
While Demare did not comment on whether Taiwan should construct a fourth nuclear plant, he said the world "cannot go without nuclear power." In his words, nuclear power is now safer and more efficient, thanks to technologies that have been improved over the years.
Demare also stressed nuclear power is only one source of energy, and many nations are developing alternative sources of energy, like wind power. "They can all co-exist," he said. ABB places a heavy emphasis on environmental protection, and its continued effort to position itself as an environmentally friendly company has never stopped, Demare said.
ABB has developed advanced motor drives that regulate the speed of motors, so that less energy is used. Meanwhile, ABB has worked with chemicals and other industrial plants on reducing carbon dioxide in the air, the chief factor contributing to global warming. "More and more companies are buying our high-tech solutions to contribute to a cleaner environment," he said.