Opportunities for Thermo Fisher Scientific have expanded as China has boosted efforts to curb air pollution.
As the problem has intensified over the past year, central and local government offices have come out with plans to address public concerns. Last fall, the central government announced that it would set up more systems in cities across China to monitor pollution levels. On January 23, Beijing’s city government approved a plan to reduce air pollutants and raise fines on violators. According to Xinhua News Agency, this represents the first time Beijing has set targets to reduce pollution, rather than simply restricting the rate of growth.
Companies that make air pollution monitoring systems stand to benefit from these efforts. One of these companies, life science equipment-maker Thermo Fisher Scientific, has become a major supplier of environmental monitoring equipment. According to Bloomberg, the company has about 70 percent market share for air quality products in Chinese cities.
Michael Shafer, president for Thermo Fisher’s China and global environmental and process monitoring business, recently answered questions over email about the company’s business in China, pollution monitoring, and how the private sector is working with the Chinese government to tackle China’s air pollution problems.
Can you give us a brief overview of Thermo Fisher Scientific’s business in China?
Shafer: We were one of the first US companies to enter China more than 30 years ago, and the country remains an important contributor to our future growth. The most important markets for Thermo Fisher in China today are healthcare, biopharmaceuticals, food safety and environmental monitoring.
How has the company’s business grown since entering the China market more than 30 years ago?
Shafer: Since entering the Chinese market three decades ago, Thermo Fisher has established a strong commercial, manufacturing and research and development infrastructure, and we are now one of the largest companies serving the life sciences market there. In addition to our new China Innovation Center in Shanghai and consumables factory in Suzhou, the company now has operations in Beijing, Guangzhou, Hong Kong, Chengdu, Shenyang and Xi’an, and we employ more than 2,500 people. Thermo Fisher has seen 20 percent growth in China since 2009, and we have invested heavily to have a strong footprint throughout China and grow as customers continue to appreciate our value proposition and our ability to help them drive productivity.
China’s pollution problems, particularly air pollution, have gained a lot of attention this past year. How has your business responded and what has been the demand for your pollution monitoring equipment?
Shafer: We’ve been the leader in air monitoring of pollutant gases and PM10 particulate in China since the early 1980s, and this has enabled us to play an ongoing role in helping the Chinese government. This includes developing an extensive network for monitoring PM2.5 and other pollutants of interest. As the air pollution issue has received more attention in China and globally over the past three years – which has increased demand for technology – we’ve added support on the ground in China, supplementing our manufacturing, field service, applications and sales personnel to better serve customers and continue to innovate across our product offering. Our new China Innovation Center in Shanghai, which includes resources dedicated to air pollution monitoring, is one recent example of the investments we’re making.
Based on your experience in pollution monitoring, what is China doing right to get its environmental problems under control? What could it be doing better?
Shafer: China has made significant strides in setting up networks to define and monitor its pollution. Today, China monitors for “criteria pollutants” (SO2, NOx, CO, PM10, PM2.5), but it also has started aggressive monitoring for ozone, volatile organic compounds, multi-metals and other pollutants. The Chinese government is also collaborating with multinational suppliers and the US Environmental Protection Agency to establish best practices for monitoring air pollution levels, as well as implementing controls to help reduce future air quality issues. China has made particular strides in recent years in monitoring and controlling industrial sources of air pollution, and it has started focusing on the power generation industry as well, and we stand poised with solutions in each of those critical areas.
How can the private sector get involved in helping solve environmental problems like air or water pollution?
Shafer: Thermo Fisher has worked closely with Chinese environmental monitoring agencies to identify practices and procedures that are working successfully in the United States and European Union using readily available technology. As this effort continues, the private sector has a role to play, as well, from companies such as ours that contribute monitoring and control technologies to the industries that must rapidly implement solutions based on these data. The environmental conditions in China are unique, including geography, weather patterns, and types of industries, and public and private entities must work together to tailor solutions and best practices in China that work best for China.
Among the industries in which Thermo Fisher operates in China which has the most potential for growth in the near future?
Shafer: Our strategy in China continues to focus on a diverse set of markets. We do, however, anticipate that in the coming years we’ll increase our presence and market share in healthcare, biopharmaceuticals, food safety and environmental monitoring.
What are your plans for the domestic market in China over the next couple of years?
Shafer: We are in sync with the Chinese government’s five-year growth plan, and we intend to match the rapid urbanization taking place in China with our own resources in key cities nationwide. Because of our scale and depth of capabilities in China, we’re well-positioned to serve growing domestic demand there, and we’ll continue to add more people and make new investments as needed to better serve local customers and drive further R&D innovation in our key markets.