Rising Demand for Green Technologies Drives Danfoss to Open Its Largest Production Facility in China
Danfoss Expands Global Automation Footprint with Major Chinese Production Hub
Danish engineering leader Danfoss has launched its largest global production facility in Haiyan, China. This strategic move responds to growing demand for industrial automation and energy-efficient technologies across Asia.
Strategic Investment in Chinese Manufacturing
Danfoss inaugurated its 126,000 square meter Haiyan Second Campus on September 2, 2025. This expansion more than doubles their manufacturing capacity in China. Moreover, it integrates production for all three business segments. The facility features two Application Development Centers serving Power Solutions and Climate Solutions divisions.
Advanced Automation Technologies for Green Transition
The new campus manufactures crucial industrial automation components including:
- Variable frequency drives for motor control
- Commercial compressors for HVAC systems
- Hydraulic pumps and motors for factory automation
- Quick disconnect connectors for maintenance efficiency
- Heat exchangers for energy recovery systems
These technologies directly support China’s decarbonization goals for buildings, transportation, and industrial sectors.
Leadership Perspectives on Global Automation Strategy
Danfoss CEO Kim Fausing emphasized China’s crucial role in their global strategy. “This investment aligns with our LEAP 2030 framework,” Fausing stated. “We’re demonstrating commitment to China’s green future through advanced production facilities.”
Arthur Xu, President of Danfoss China, highlighted their local partnerships. “Our 30-year presence in China shows our dedication to the market’s specific automation needs,” Xu noted.
Decarbonization in Industrial Operations
The facility itself serves as a showcase for sustainable manufacturing. Danfoss implemented their three-step approach: Reduce, Reuse, and Re-source energy consumption. Additionally, they secured a 20-year green power agreement with CGN New Energy Holding. Consequently, all Haiyan operations now run on renewable electricity.
Economic Impact and Local Partnerships
Since establishing operations in Haiyan in 2005, Danfoss has become a major employer and economic contributor. Local official Wang Suishe acknowledged their role in creating high-value jobs and developing regional supply chains.
Industry Context and Automation Trends
The global industrial automation market continues expanding rapidly. According to MarketsandMarkets research, the factory automation sector will reach $306.2 billion by 2027. This growth is largely driven by energy efficiency demands and smart manufacturing initiatives. Danfoss’s investment positions them to capture this expanding market, particularly in China’s manufacturing sector.
Expert Analysis: Implications for Automation Professionals
From World of PLC’s perspective, this expansion signals several important industry trends. First, international companies are increasingly localizing production to serve regional markets more effectively. Second, energy-efficient automation technologies represent the fastest-growing segment within industrial automation.
Industrial automation professionals should note Danfoss’s integrated approach. They’re combining manufacturing with application development centers. This creates shorter feedback loops between product development and customer implementation.
For comprehensive industrial automation solutions including PLC programming interfaces and control systems, visit World of PLC Limited to explore how these technologies integrate into modern manufacturing environments.
Practical Applications in Modern Manufacturing
Danfoss technologies enable several key industrial automation scenarios:
- Energy management systems using variable speed drives can reduce motor electricity consumption by up to 40%
- Integrated hydraulic systems provide precise motion control for heavy machinery
- Heat recovery solutions capture waste energy for reuse in manufacturing processes
- Commercial compressor systems optimize refrigeration cycles in food processing and storage facilities
Frequently Asked Questions
How does Danfoss’s expansion affect global industrial automation competition?
This investment intensifies competition in the Asian automation market while strengthening Danfoss’s ability to deliver customized solutions for regional manufacturers.
What role do variable frequency drives play in industrial energy efficiency?
Drives control motor speed to match actual load requirements, typically reducing energy consumption by 25-40% compared to fixed-speed operations.
How important is localization in industrial automation manufacturing?
Local production enables faster response times, customized solutions for regional standards, and reduced logistics costs – critical factors in competitive automation markets.
