The US$5 million factory in Xidu will manufacture and assemble engineered components like pumps and valves, reducing costs for the firm's Chinese customers and improving delivery, according to the firm.

APV has been supplying locally assembled plate heat exchangers from its Shunyi factory since 1997 but the new Shanghai facility will add production of other components as well as design, engineering, sales and service offices.

"Our customers can now locally source the same APV quality products enabling them to significantly reduce operating costs and lead times," said Hui Hao Yu, managing director of APV China.

European processing and packaging firms are trying to manufacture more of their parts in China in a bid to make their machinery more competitive for customers that have access to a growing range of cheaper domestic machines.

Producers of filling lines like KHS and Sidel have both taken steps in recent years to lower their costs in China; KHS announced last month that it had bought a local manufacturer, giving it a significant cost advantage.

"APV has grown the Asia Pacific business from less than 15 per cent to 25 per cent of group sales over the past two years, yet we have less than 5 per cent of our manufacturing resources in the region, so this is a logical step for APV," added Chris Shelley, the firm's vice president for business development.

The firm's current clients include Bright Dairy, Yili, Nestle, Uni-President, Yantai and Wahaha Group.