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Flowserve to Build Up Supremacy by Localization

Flowserve's manufacturing base was formally put into operation on April 17 in SIP. Almost all the top-notch seniors from Flowserve HQ in Dallas were present at the grand celebration to witness the official commencement.

As the only global manufacturer of three major categories of products, pumps, valves, and seals, Flowserve claims USD 200-million order from China, and the fast growth of the energy market in China is appealing invitingly to Flowserve decision makers.

"We are clear about the potentials of the petroleum and petro-chemical industries in China, and their demands for our products are growing at the annual rates of 10% and 15% respectively," said Lewis Kling, President of Flowserve Corporation. "It is our first step to bring into China our products, and the next thing to do is to develop Chinese market through joint ventures and cooperation with the Chinese partners."

What makes Flowserve's strategy different is the fact that it focuses not only on the cheap labor force, but also on the localization to the maximum extent.

The president said, "Localization will reduce the operation cost, and we're ready to share the benefit with our customers."

In Lewis Kling's view, the best approach to win over market share in China is to operate through localization in the interest of both the customers and the manufacturer.

In Flowserve's strategy, localization is not as simple as just moving workshops onto China. Establishment of R&D base and the training of the locals are already being unfolded. As the first step, a billion-watt testing center has been set up and put into use.

Flowserve's fast response centers are deployed across the country to better serve customers. Investment will be increased in Flowserve Suzhou plant to boost capacity, and build up a business platform in China in support of its global operation.

Flowserve will localize the raw material supply at the maximum speed to cater for the demands of customers and maintain its competitive edge.

May 29, 2007

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