ABB Looks to China and Chile
Power distribution and automation technology company ABB, Ltd. (NYSE: ABB – $23.10) said it has formed a global alliance with China’s BYD Co. to develop energy storage systems for electric car charging and renewable energy uses. Zurich-based ABB said the pair will work together on energy storage systems connected to the electricity grid, and for solar energy and micro grid applications among others. BYD is an established battery manufacturer and automotive company, while ABB will use its expertise in energy storage and power electronics. The two companies had previously worked together with ABB supplying fast-chargers for BYD’s electric Denza car, a joint venture with German carmaker Daimler. Separately, ABB announced it will build two substations in Chile to expand the country’s transmission network. ABB will design, supply, install and commission a gas-insulated switchgear substation south of Santiago near the existing Rapel substation, including high-voltage equipment, protection and telecommunication and ancillary systems. This expansion will reinforce Chile’s Central Interconnected Grid, which provides power from the Atacama region in the north to the Los Lagos region in the south and accounts for about 75 percent of the total Chilean power capacity, serving more than 90 percent of the population. ABB did not disclose any financial details about the two deals. The underperforming shares remain a good selection for patient conservative investors as the long-term trend remains favorable. Also, the dividend yield of 3.4% will help mitigate downside risk as well as the wait for ABB to gain traction in its core businesses as the global economy gradually improves.