Beverage giant Wahaha forms robotics company to step up smart manufacturing

By Jill Shen
2 min read
The production line in Wahaha’s Hangzhou factory (Image credit: Wahaha).

Chinese beverage behemoth Wahaha is taking an ambitious step into the world of robotics, launching a smart manufacturing company that is under the direct supervision of the company founder, billionaire businessman Zong Qinghou.

According to the company database website Qichacha, the Zhejiang Wahaha Intelligent Robotics Company was just set up in the eastern Chinese city of Hangzhou last week with registered capital of RMB 40 million (around $6 million). The newly formed company will specialize in the design, manufacture, and sale of intelligent robotics, and will also offer technology consulting services. Wahaha owns 65% shares of the company, with its boss Zong acting as chairman.

“People have been less willing to do routine manual work, and dangerous jobs should not involve manpower,” (our translation) Zong told Chinese media Caixin in March 2017, on why the company moved into the business, which began in 2011. A company spokeswoman told TechNode on Tuesday that it is the first domestic company to adopt intelligent solutions in the beverage industry, as “the combination of smart technologies and traditional manufacturing has been a growing trend.”

Founded by Zong in 1987 in Hangzhou, Wahaha is one of the country’s major food and beverage manufacturers, with more than 80 production bases and 30,000 employees around the country. It has more than 100 products in the Chinese consumer market, including packaged drinking water, probiotic drinks, and beer.

However, the privately held beverage company’s core business has declined significantly over the past five years. Sales revenue declined to RMB 46.4 billion in 2017, almost half of the RMB 78.3 billion earned in 2013, Jiemian reported, citing figures released in August by state-backed industry association All-China Federation of Industry and Commerce.

Automation has become an essential part of the country’s manufacturing industries in the past decade, when China’s established companies began adopting robotic systems for various applications to improve productivity. The Hangzhou-based beverage giant said that it has developed a number of intelligent machinery for production and goods delivery, including an automatic labeling machine and an advanced robot stacker.

Guangdong-based home appliances maker Midea announced in 2012 it would spend around RMB 5 billion to reconstruct its factories with enhanced automation. Two years later, it launched an RMB 1 billion subsidiary for producing robots for both consumer and business use. Since 2017,  Midea has also been the principal shareholder of Kuka, a German robot manufacturer which has seen declining growth and plummeting profits in the Chinese market over the past year.

For intelligent robotics, Wahaha founder Zong believes that knowledge in core technologies is far more important than processing and manufacturing machine bodies. Germany holds the upper hand in this field, and Chinese companies rely heavily on imports for core parts. “As a result, it is hard to reduce costs in the production of robotics,” Zong told Caixin.

China is aiming to become a world leader in advanced technologies including artificial intelligence, new energy, and robotics. In an interview during the central government’s Two Sessions meetings in March, Miao Wei, head of China’s Ministry of Industry and Information Technology (MIIT), said the state government is urging domestic industry players to enhance their technological capabilities and accelerate nationwide efforts to be an innovation center in the global manufacturing sector.

Local universities are responding to the government call for a more qualified workforce in these industries. On Mar. 21, the Chinese Education Ministry announced that it approved around 2,000 new majors for the country’s nine million high school graduates in 2019. A total of 101 universities will offer engineering undergraduate degrees with a robotics major to their 2019 new student classes, and 196 universities will offer data analysis majors for science undergraduate degrees, according to Beijing Daily (in Chinese).