The headquarters of Vaillant Group in Remscheid, Germany. With 12,000 employees, it now has a presence in more than 20 nations and regions and its products are sold in more than 60 countries. Provided to China Daily

Company to enhance manufacturing capacity at Wuxi plant, as demand grows for individual heating

As a boy at the age of 16, Carsten Voigtlander became enthusiastic about chemistry and loved conducting experiments."They were magic and a little bit mysterious," says Voigtlander, now 49, and chief executive officer of Germany's Vaillant Group.

Mysterious and complicated things were central to Voigtlander's early life. In order to follow his heart, he says, he completed studies in mechanical engineering and process technology at the Technical University of Braunschweig, one of the top universities for engineering in Germany, and gained a doctorate degree in thermodynamics. After his graduation, he carried out scientific research work at the Institute of Thermodynamics at the university for years before joining Oerlikon Neumag, a division of Oerlikon Textile GmbH & Co, taking a series of managerial jobs.

"At university, I really liked to do the engineering stuff. I enjoyed being an engineer but, as I started in the industry, I also liked to broaden my views," he says.

In 2007 he was appointed CEO of Oerlikon Textile, based in Remscheid. It was an opportunity for him to develop a wider perspective from technical research to top-level corporate operations. Two years later, Voigtlander took the position as managing director of the research and development division. In 2011, he became the first CEO in the company's history to also be in charge of sales and marketing.

"My (career) roots were very really close to my actual business in the heating industry now. I had been in China many, many times before I joined Vaillant Group because demand rapidly increased in Asian textile machinery markets. Now I can use this past experience for Vaillant."

Vaillant is a family-owned company in the heating, ventilation and air-conditioning industry with a history of 139 years. With 12,000 employees, it now has a presence in more than 20 nations and regions and its products are sold in more than 60 countries. The company currently has a 27 percent market share in Europe and a 23 percent share globally in the industry.

"I am proud of being the first CEO of Vaillant," Voigtlander says, adding that working with the 100 percent family-owned company greatly varies from one that is publicly traded. It focuses more on long-term investment, maybe 10 years of development, instead of short-term returns.

"They finally chose me to be their CEO because I am down-to-earth, not a dreamer, and know the technological aspects because of my engineering background and desire to find simple solutions," he says.

Unlike his early dreams of pursuing mysterious and complicated subjects, "seeking simple solutions and getting things done" is a very important part of Voigtlander's present working spirit.

In March, Vaillant says it had continued to gain market share and grow in the 2012 financial year. Net sales at the group level increased by more than 2 percent year-on-year to 2.33 billion euros. China, Russia and Eastern Europe are the group's key regions, where net sales surged. The company says the three markets will continue to be growth engines.

"At Vaillant Group, we traditionally focus mainly on Europe. After Europe, China is the second place that Vaillant wants to input a large amount of human and material resources," he says.

Since 2007, the boiler maker's sales have grown by double digits year-on-year in China. In addition to the existing 21 branch offices, Vaillant plans to open at least one more every year in the emerging market. In 2013 the company will open offices in Tianjin and Shenyang, Liaoning province, and plans to enhance its manufacturing capacity at its Wuxi plant in Jiangsu province, which serves the entire Asia-Pacific market.

"Currently, China is the eighth-largest market for us, and I expect it will become No 6 in the next few years," Voigtlander says.

In an effort to achieve this goal, Voigtlander is highly supportive of the idea of continuing to promote Vaillant's traditional water heater products, which is "Vaillant's root and what the company is good at". At the same time, it is making great efforts to introduce its new brand Protherm as its new growth driver in China.

The German company has noticed that the share of affordable housing is increasing in China's real estate market, although the govenemnt budget on housing is relatively tight. As a result, Vaillant limited the introduction of high-end products and expanded the promotion of the Protherm brand, which is around 30 percent cheaper than the Vaillant brand, for price-sensitive markets.

In early April, the Chinese government says it aims to complete 4.7 million units of affoardable housing across the country by the end of this year, as part of years of effort to get China's skyrocketing house prices under control. It says more people will have a chance to make their dreams of owning an apartment come true, especially those living in big cities.

In addition to the affordable housing projects, Vaillant has also entered what it calls one-off business.

"Individual heating will be the fastest growing factor in the future, especially in South China, as the vast area does not have a centralized heating system," says Voigtlander.

He says more and more families in southern China want to be equipped with individual heating systems to cope with bitter winters.

Vaillant's products can save as much as 30 percent of energy, and high-efficiency technology will be a key selling point in 2013. In general, Vaillant's products are priced around 20 percent higher than domestic counterparts.

"There is huge room for the future development of Vaillant in China, paticularly in southern China," says Jing Tao, secretary-general of the Shanghai Heating Association.

"Vaillant has been continuously gaining market share since it entered the Chinese market in 1995, together with other international counterparts such as Bosch Group and Ariston Thermo Group, because of its German origin, efficiency and user-friendly products," says Jing.

"Their middle and high-end products will target China's VIP customers, while their Protherm brand products will be available in the second- and third-tier cities, which will see a great deal of development."

As a group, Bosch set up its first sales office in China as early as 1909. Bosch China generated sales of 7.3 billion yuan in its consumer goods and building technology business sector in 2011, in which heating systems and household appliances play active roles.

Italy-based Ariston entered China in 1986 and its heating business also got access to the market very early, obtaining an early branding advantage.

Industry experts says compared with Vaillant, Bosch and Ariston have more brand awareness among the Chinese and relatively lower prices, with all Ariston products sold locally being made in China. But the companies take totally different positions, with Vaillant focusing on the heating industry while Bosch and Ariston have a wider range of business.

Jing added that international companies face a great challenge to improve their products and brand awareness among Chinese consumers, especially in the north, where most families don't feel the necessity to buy an individual boiler for their homes when they have enjoyed centralized heating for decades.

Although he is devoted to engineering and his job as CEO, Voigtlander's expectations for his two sons, aged 20 and 17, is just to "choose something they really like".

He says he will not push them in any special direction and he will be supportive of their own decisions.

Voigtlander tries to work 14 or 15 hours a day from Monday to Friday so he can enjoy most of his weekend walking and cycling with his family.

"If your family is not supporting your job, it's very difficult to be successful. For me, the most relaxing thing is to be together with my family, with my wife and kids," he says.

liwoke@chinadaily.com.cn

( China Daily European Weekly 06/14/2013 page19)