Shanghai Electric Group

Shanghai Electric Group Co., Ltd.

    Overview: Charged up since 2004

    Shanghai Electric Group Company Limited (SEC) is a multinational power generation and electrical equipment manufacturing company headquartered in Shanghai, China. It has a long history and one of its subsidiaries was already established before the year 1880.

    One of SEC's subsidiaries was established in 1880
    The four major business sectors of Shanghai Electric are new energy, high-efficiency and clean energy, industrial equipment, and modern service industries equipment and it is the world's largest manufacturer of steam turbines.

    Shanghai Electric is listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange. In 2011, 61 percent of SEC's stocks were state-owned.

    The company generated approximately 44 percent of its revenue in the segment "high efficiency and clean energy", while 29 percent was generated in the division "industrial equipment".


    Internationalization Strategy: Supply the World with Energy

    The long-term goal of the company is to expand globally and to establish as an international brand. In 2011, SEC made 23 percent of its total revenue overseas. Compared to 2010, this was an increase of four percent. Internationally, the company especially focuses on the power station engineering business. In this segemnt Shanghai Electric already started projects in India, Africa and the Middle-East.

    In October 2010, Shanghai Electric and Reliance Power of India signed a USD 8.3 bn agreement to supply 36 coal-fired thermal power generation units to Reliance over the subsequent three years.

    Totally, SEC has over 50 joint ventures. In 2011, it founded a joint venture with the French company Alstom. The aim of this cooperation was to combine both companies' power plant boiler divisions, which generate annual sales of about USD 3.6 bn.

    In 2009, the total value of overseas projects in execution by SEC reached USD 12 bn
    Another important cooperation started in 2011, when SEC and the German Siemens AG agreed to establish two new joint ventures, in which Shanghai Electric and Siemens hold 51 percent and 49 percent interests respectively. The manufacturing facility will develop and produce wind turbines for the Chinese market and Siemens' global supply network. The sales unit will be responsible for distribution of wind turbines, project management and execution as well as related development and services in China.


    R&D and Intellectual Property: Innovation as driving Force

    Shanghai Electric Group has a strong focus on R&D. With innovation as a driving force, it strives to improve its competitiveness and provide more efficient energy supply and industry equipment.

    The following graphics represent SEC's patent and utility model applications. While the first two graphs depict the distribution over the years and across regions, the latter two graphs illustrate the distribution across technology sectors.

    The main difference between a patent and an utility model is the durability and the strength of protection. Patents are protected for twenty years, while utility models are only protected for ten years. Thus, an utility model can be described as a weaker form of patent.

    The first chart shows the company's patent and utility model applications from 2000 to 2010. A constant increase of applications over this period of time can be observed. Only in 2009, the number of filed patents decreased. The reason for that could be the financial crisis. SEC was founded in 2004, but has filed patents and utility rights since 1999. The reason is that a lot of SEC's subsidiaries were established long before 2004.

    The chart below shows the geographical distribution of applications. It is conspicuous that SEC filed almost all patents in China. There have only been a few applications in other areas or countries. It can be expected that this will change in the next years, as SEC's is willing to boost its internationalization efforts.

    The next two charts show the patent and utility model applications by technological sector. SEC focuses on electrical devices, engineering and energy, with more than 800 intellectual property rights in this sector. Other important areas are the sectors analysis, measurement, control technology and telecommunications. In these two areas SEC filed 28 percent of all applications.

    The high number of applications in the category “others” reflects the fact that the company engages in highly diversified R&D activities.


    References:

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