Business

Schneider Electric to move US headquarters to Andover

The new building showcases Schneider’s green technologies: Its own products will run the heating, cooling, and lighting systems.
Schneider Electric
The new building showcases Schneider’s green technologies: Its own products will run the heating, cooling, and lighting systems.

Schneider Electric, an international energy management giant, is set to relocate its US headquarters from Illinois to Andover on Wednesday, a move designed to improve its access to the engineering talent coming out of Boston-area universities.

The company had previously announced that a multimillion-dollar glass-clad building near interstates 93 and 495 would function as its North American research-and-development hub, absorbing employees from smaller offices nearby.

But the decision to move its headquarters there, too, came more recently, part of an effort to emphasize Schneider’s shift from a maker of traditional electrical gear to a technology outfit that manufactures sophisticated computerized electrical and environmental systems used in data centers and other buildings.

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“We’re like a $35 billion startup — people have no idea who we are,” acknowledged Laurent Vernerey, president and chief executive of North America operations. “With this new headquarters, I wanted to make a statement. We should be in a place where customers will come on a regular basis.”

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Schneider pitches itself as a one-stop-shop for institutions that want to increase their energy efficiency. Its products, such as networks of controllers, sensors, and automation software, can squeeze more power out of everything from electrical and lighting systems at a hospital to cooling systems for Internet servers. Labs in the new building will let the company’s engineers test improved versions of those systems under real-world conditions.

The company is weaning itself off its old business of selling switches, buttons, and relays, using a series of acquisitions to aggressively pivot into the field of smart power systems.

It is also involved in the emerging “Internet of things,” a broad term for networks of sensors and wirelessly connected objects, such as light bulbs that tell utility companies when they are on or off, or heart monitors that beam health information to patients’ doctors.

Such technology promises to generate vast volumes of valuable data; one of Schneider’s teams in Andover will work on algorithms that can analyze the information to reveal consumer behavior.

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“By inserting enough computing power and intelligence into each of our devices, we can connect all these things,” Vernerey said. “But we also believe this is going to generate a large amount of data, and once you have that data, what do you do with it?”

The new facility, on Federal Street, comprises a renovated 160,000-square-foot building and a 75,000-square-foot addition. It contains numerous testing labs, along with training and conference space for executives. About 750 of the company’s 1,900 Massachusetts employees will work there.

Schneider is using the building to showcase some of its green technologies: It has installed about $8 million worth of its own products, which will run the facility’s heating, cooling, and lighting systems. The headquarters also earned the LEED certification from the US Green Building Council, a designation awarded to environmentally friendly buildings. The efficiency measures should reduce operating costs by about 30 percent, the company said.

The cost of the construction, which Schneider said totaled tens of millions of dollars, was partially offset by town and state money, including a five-year tax-increment financing agreement with Andover that’s valued at $1.2 million, a state investment tax credit for $285,000, and a one-year corporate income tax deduction of 10 percent for the cost of renovating the building.

But Vernerey said those incentives were not the main reason he decided to relocate the company’s headquarters.

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“We absolutely wanted absolutely to stay in the Boston high-tech environment, close to the vibrant community of universities,” he said.

While relatively unknown to consumers, France-based Schneider is a major player in the electrical equipment industry, with 160,000 employees worldwide. The United States is the company’s largest market, accounting for $8 billion of its $35 billion in annual revenue.

Governor Deval Patrick is expected to attend Wednesday’s opening ceremony.

“I am excited to welcome Schneider Electric’s new R&D Center and North American headquarters to Massachusetts,” Patrick said in a statement. “We are committed to making Massachusetts the global hub of technology innovation and companies like Schneider Electric are important to helping the Commonwealth continue its competitive edge.”

Dan Adams can be reached
at dadams@globe.com.
Find him on Twitter @DanielAdams86.