UPDATE 1-Siemens sees no quick recovery of Chinese demand

Thu Apr 11, 2013 9:51am EDT

* Siemens Industry CEO still sees long-term growth in China

* Says U.S. "bumpy" but growth driven by shale gas boom

* Siemens Industry to contribute 1.1 bln euros of savings

FRANKFURT, April 11 (Reuters) - Germany's Siemens AG said while Chinese industrial demand seemed to be stabilising it did not expect a notable recovery in the next two quarters.

"China is not and probably will not be an area of strength for the next quarters," Siegfried Russwurm, chief executive of Siemens' Industry business, said at an investor event on Thursday.

"But we are convinced that in the long run China is the place to be," he said.

Slowing growth in China, euro zone recession and a muted recovery in the United States prompted Siemens last year to announce a push to save 6 billion euros ($7.9 billion) over two years.

The company, whose competitors include General Electric Co , ABB Ltd and Schneider Electric SA, said the Industry business would contribute 1.1 billion euros of savings, through measures such as cutting procurement costs and shutting or selling some businesses, affecting thousands of jobs.

For instance, it is slashing 1,700 jobs by changing its sales structure, 500 jobs at its headquarters, 500 by selling a foundry in eastern Germany and 1,000 by scaling back its solar inverters business.

With its savings programme, Siemens aims to improve its margin on core operating profit to at least 12 percent from 9.5 percent last year. The Industry business is to improve its margin to at least 14 percent from 12 percent.

Siemens said the U.S. market, which accounts for just over a fifth of group sales, was "a bit bumpy" but would be robust in the longer term, thanks to a boom in shale gas extraction that has pushed down energy prices and is driving investments in the manufacturing sector.

"Multinational companies don't want to miss the opportunity, they are investing in the United States. So in the long run the climate is good," Russwurm said.