Siemens AG (SIE) has earmarked more than 1 billion euros ($1.3 billion) to expand production of gas- turbines and fend off General Electric Co. (GE) as they jostle for share of the expanding market. A “genuine boom” is under way in some regions, with the gas-turbine market growing more than 9 percent annually in the Commonwealth of Independent States, Roland Fischer, the head of Munich-based Siemens’ Fossil Power Division, said in an interview. The division generated 14 percent of Siemens’s total 74 billion euros in revenue last year. Siemens, which claims the No. 1 spot in larger, flexible turbines, is betting rising U.S. shale-gas output and its focus on gas-turbines will help it outflank GE and Alstom SA (ALO), which focused more on steam-turbines. U.S. spending on upgrading power plants to meet tighter emission rules may touch $100 billion, and falling gas prices will likely tempt utilities away from coal, said Peter Reilly, an analyst at Deutsche Bank. “We believe our technology is two to three years ahead of the competition,” Fischer said by phone on Jan. 17. “Competition is tough. It’s been hard work to get where we are today. Our rivals are surely not happy. We will do our utmost not to allow anyone to take that position from us.” Fossil power-generation, the largest of Siemens’ 10 main divisions, has long been an earnings driver and a swelling order book will help offset sluggish demand in areas such as health- care equipment. Under Fischer, sales last year rose 6.8 percent to 10.2 billion euros and earnings jumped 85 percent to 2.83 billion euros, eclipsing the entire profit produced by the Munich-based company’s health-care operation.
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