The largest manufacturer of automation control systems in China
A reporter from China Energy News interviewed Xu Changrong, the General Manager of Beijing Hollysys Automation Drive Technology Co., Ltd., the largest manufacturer of automation control systems in China. This doctoral graduate not only has a thorough understanding of product technology research but also possesses a profound knowledge of the industry and market. He stated that the "Twelfth Five-Year Plan" continues to emphasize the transformation of the economic development model, and improving the level of industrial automation is the way to achieve this. China's automation industry is poised for significant development in the next five years.
Q: Last year, the "Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries" was issued. This year marks the beginning of the "Twelfth Five-Year Plan" period. The country has repeatedly emphasized the need to transform the mode of economic development. How will the rapid development of emerging industries focused on energy conservation and consumption reduction affect the automation industry?
Xu Changrong: I believe this will bring new development opportunities to the automation industry. Economic transformation is inseparable from energy conservation and consumption reduction. The improvement of energy utilization efficiency can only be achieved through automation. Additionally, in terms of high-end equipment manufacturing, the main focus is on enhancing the level of automation in order to achieve the goal of energy conservation and emission reduction.
In the field of wind power control, we have fully acquired independent intellectual property rights for controllers and drives. We have been involved in this emerging business since 2008. Wind power has only begun to develop rapidly in recent years, and the market has just started. Although this business currently accounts for a small share of the company's business, we are still optimistic about this market. The national support policies for new energy are becoming stronger and stronger, and the market demand will also increase. This is an excellent opportunity for Hollysys to open up the market. Our hardware already has the ability to compete in the market. It can be predicted that the wind power business will account for 20%-30% of the company's business and about 5% of the group's business in 2-3 years. At the same time, we also have solar energy receiving and control system technology in solar photovoltaics. The specific business development direction depends on the size of the market.
Q: During the "12th Five-Year Plan" period, the country continued to vigorously promote the localization of major equipment. Judging from local planning and the "12th Five-Year Plan" industrial planning of various industries, "localization" has been put on the government's agenda. Independent innovation has always been a bottleneck for the automation industry to achieve localization. What do you think should be done to improve the level of independent innovation in the industry?
Xu Changrong: Firstly, policy support is needed. Currently, the market satisfaction rate of domestically produced equipment in China is less than 60%, and only about one-third of it can reach the international advanced level. Among these, there are some imported products. China has already possessed the research and development capabilities, but as domestic products have just entered the market, domestic users are afraid of taking risks and are worried about immature technology, so they dare not purchase them, preferring to import mature foreign products at high prices. This is very unfavorable for the development of domestic enterprises. The "Decision of the State Council on Accelerating the Cultivation and Development of Strategic Emerging Industries" has put forward some good policies and guidelines to address issues such as imperfect investment and financing, fiscal and tax policies, and institutional mechanisms for entrepreneurship. This will provide support for enterprises' independent innovation activities.
At the same time, enterprises must possess a sense of independent innovation, prioritize talent cultivation, and increase R&D investment. At Hollysys, R&D expenses account for 10% of our annual sales revenue, which is exceptionally high. Last year, we established a R&D center in Xi'an High-tech Zone. It is expected that within three years, the number of R&D personnel will exceed 1,000. This will further enhance the overall technological strength of the group and play a significant role in promoting the development of industries such as automation, intelligence, informatization, digitization, high-end equipment, and electronic information in western China. On this basis, the Hollysys R&D center will also establish the largest embedded software R&D team in China, striving to achieve global industry leadership in all major technologies within three years after the project is completed.
Q: For technology-intensive enterprises, talent is the most valuable asset. What are the characteristics of Hollysys' talent strategy?
Xu Changrong: It can be said that talent turnover is inevitable in our automation industry. Generally, we provide a good working environment and generous rewards to make employees feel a sense of belonging in the company and realize their own value. At the same time, we also need to have an open mindset. I often say that the stage is made by oneself. As long as the stage provided by Hollysys is large enough and there is room for employees to show their talents, I believe it can form a strong cohesion and centripetal force.
