More Chinese industrial firms are building their factories in Europe, says regional head of Germany’s Exyte

More Chinese industrial companies – from electric car battery makers to pharmaceuticals – are looking to build manufacturing plants in Europe to be closer to their customers, according to the regional head of German factory builder Exyte.

Plans for expansion in Europe are becoming particularly popular among firms in China’s biotechnology and pharmaceutical sectors, where meeting European standards and certification are required for market entry. Chemical and electronics firms are also making similar investments, said Mark Garvey, Exyte’s president of Asia-Pacific.

“There is a new phenomenon – a counter flow of investment – by Asian companies looking to invest in Europe,” he said in a rare interview by the privately-owned company. “We are starting to see some interesting conversations about the possibility of people doing that.”

Exyte, which specialises in building factories for chip makers, was last year spun out of M+W Group, a century-old engineering and construction group.

Garvey said the trend is part of the globalisation drive by Chinese manufacturers, even as they face rising protectionism in the United States and some European nations amid intensifying competition in the global information technology industry.

Chinese biotech and pharmaceutical firms have faced less intense scrutiny of their overseas expansion as health care is not deemed to be one of the sensitive sectors that raise national security concerns, and some are spreading their tentacles into Europe.

For example, biologic drugs development company Wuxi Biologics last May announced plans to build a €325 million (US$370 million) plant in Ireland that will hire 700 staff in the next two years.