Germany-based Lenze GmbH has invested 10 million euros (US$14 million) to set up a plant in Shanghai, its first in China, as the drive system maker localizes production to meet the growing demand for its products.

The Shanghai plant, which covers 12,000 square meters and will serve as its Asia headquarters, will have an annual production capacity of more than 20,000 geared motors next year, and it is likely to reach 80,000 a year by 2010, it said yesterday.

The company, which also makes frequency inverters, clutches and brakes for industries like automobile, tobacco and printing, will also use the factory as an export base and to offer technical support to the Southeast Asian market.

The company targets sales of 261 million yuan (US$34 million) in China this year. It plans to boost its staff strength to 350 by 2010 from 200 now.