Chinese construction machinery enterprises accelerate the layout of overseas markets

Recently, the 15th Russian International Construction Machinery Exhibition (CTT Exhibition) was held in Moscow. 153 domestic well-known construction machinery companies such as Sany Heavy Industry (600031, shares it), Zoomlion (000157, shares it), Xugong, Liugong (000528, shares it) and other products have been widely concerned. According to official preliminary statistics, Chinese construction machinery enterprises received 9000 international customers at the CTT exhibition, and the intentional purchase amount exceeded 100 million US dollars.

In recent years, due to rising domestic market costs, reduced orders and lower profit margins, more and more Chinese construction machinery companies have accelerated their overseas markets and are gradually demonstrating “China Power” on the global stage.

Involved in the Russian market

At the just-concluded 15th Russia International Construction and Construction Machinery Exhibition, Chinese construction machinery enterprises are the most eye-catching, including Sany Heavy Industry, Zoomlion, Xugong, Lingong, Liugong, and SINOMACH. 153 Chinese companies, including construction machinery manufacturers, attended the exhibition with a variety of products.

Among them, Zoomlion brings its concrete machinery, construction cranes, engineering cranes and earthmoving machinery to participate. This year is the 10th year that Zoomlion has come to Russia to participate in the CTT exhibition.

The relevant person in charge of the Zoomlion Administration Department said in an interview with the reporter of China United Business Daily: "Compared with products from Europe and the United States, China's construction machinery products are characterized by high quality and low price on the basis of mature technology. The Russian market is extremely popular. The products are mainly used for infrastructure construction in Russia's construction, energy, environment and transportation engineering."

According to the data in the "Analysis of Construction Machinery Markets in the Commonwealth of Independent States", since 2000, the Russian construction market has grown rapidly at an annual rate of 10% to 15%, which has greatly boosted the development of the construction machinery market. From 2013 to 2016, the annual growth rate of construction machinery products market demand is expected to be around 12%, of which imported machinery and equipment accounted for 30% of Russia's total imports.

Therefore, many well-known domestic construction machinery manufacturing enterprises seized the opportunity in time, aimed at the Russian market, and achieved good results. Statistics show that in 2011, China's engineering machinery products exported to Russia totaled 798 million US dollars. By 2013, this amount had increased to 1.107 billion US dollars.

Zhang Jianguo, senior director of Zoomlion and general manager of overseas company, said in an interview with the media that compared with products in Europe and America, China's construction machinery products are characterized by high quality and low price on the basis of mature technology, and are highly influenced by the Russian market. Great favor. The products are mainly used for infrastructure construction in Russia's construction, energy, environment and transportation engineering.

Su Zimeng, secretary general of China Construction Machinery Industry Association, believes that the Russian market is a touchstone for Chinese construction machinery companies. By summing up the experience of successfully exploring the Russian market, Chinese construction machinery companies may create better performance in overseas markets.

Create a new situation in overseas markets

Chinese construction machinery companies not only shine in the Russian market, but also actively deploy the global market. With large-scale enterprises such as Xugong, Sanyi and Zhonglian frequently staged overseas mergers and acquisitions, the pace of construction machinery industry and international integration is speeding up, and a new situation in overseas markets is being created.

In recent years, the domestic and international markets have been constantly changing, the domestic market costs have risen, orders have decreased, and profit margins have been low. Many construction machinery companies are facing a severe test of transformation and upgrading. According to data from the China Machinery Industry Federation, the annual growth rate of profits in the machinery industry has dropped from 55.6% in 2010 to 15.6% in 2013.

Therefore, expanding overseas markets has become an important direction for the transformation and upgrading of Chinese construction machinery enterprises.

Take the leading domestic engineering machinery enterprises as an example. In 2013, Sany Heavy Industry's overseas sales revenue reached 10.874 billion yuan, accounting for nearly 30% of total sales revenue, up 24.42% year-on-year. The business covers more than 110 countries and regions. Zoomlion’s overseas revenue last year also reached 3.5 billion yuan, a year-on-year increase of 26.31%.

According to the reporter, these overseas well-known construction machinery companies have a very broad overseas layout, mainly targeting North America, Southeast Asia, Africa and South America. The person in charge of the administrative department of Zoomlion told the reporter: "In 2014, the growth demand of global construction machinery market mainly comes from the investment growth of infrastructure in emerging economies such as Russia, India, Vietnam, Thailand, Brazil and Africa. Some overseas bases and networks. Enterprises with perfect layout, strong technical innovation capability and strong brand influence will stand out from the competition."

For a long time, the North American market has been monopolized by high-end brands, and it is difficult for Chinese companies to enter. However, at the Las Vegas Construction Machinery Exhibition held in March this year, Chinese companies such as Sany Heavy Industry, Zoomlion, and Shanhe Intelligent (002097, shares) have returned strongly. In the end, Zoomlion signed a contract with the famous North American crane agent Global Cranes for about US$20 million; Sany won more than US$130 million in sales and intentions.

In addition, in May this year, Premier Li Keqiang visited the four African countries including Ethiopia, Nigeria, Angola and Kenya. During the visit, Li Keqiang emphasized on several occasions that Chinese equipment should be "goed out". His speech on helping Africa to build a high-speed rail network gave Chinese construction machinery enterprises great encouragement.

It is reported that the China Civil Engineering Group under the China Railway Construction Corporation and the Federal Ministry of Communications of Nigeria have signed a framework contract for the Nigerian Coastal Railway Project, with a total amount of 13.122 billion US dollars. The projects will all be built with Chinese standards.

Zhang Zongyan, president of China Railway Construction Co., Ltd., said that the construction of this project can greatly stimulate the export of Chinese equipment, involving 3 billion to 4 billion US dollars of construction machinery and equipment.

Enhancing international competitiveness will become the focus of the future

At present, with the increasingly fierce competition in the North American market, the demand in the African market is gradually saturated, and the door to the South American market is slowly opening up to Chinese construction machinery companies.

In the interview, the reporter learned that in May this year, Shanghai Shibang Machinery Co., Ltd. once again seized an order of more than 30 million yuan in the South American market.

It is reported that South American countries, including Brazil, the world's sixth largest economy, have maintained strong infrastructure construction needs in recent years, and South America has rich mineral deposits and huge market potential. According to a recent report by the Chilean Investment Information Consultation, four South American countries, including Chile, Peru, Colombia and Brazil, will invest US$508 billion in infrastructure in 2012-2021, focusing on transportation, municipal facilities, telecommunications, drinking water and sanitation, and water conservancy. Infrastructure and intercity highways, etc. This is undoubtedly a rare opportunity for domestic construction machinery companies.

However, it is worth noting that compared with the international advanced level, there is still a gap in the overall level of Chinese construction machinery, and some products are in the second and third-rate status in the international mainstream market; Chinese construction machinery enterprises are compared with large construction machinery multinational enterprise groups. The competitiveness is still relatively weak.

In this regard, Cai Weici, special adviser to the China Machinery Industry Federation, said that it is not easy for Chinese construction machinery manufacturers to enter the international market. They should be fully prepared and steadily promoted in overseas markets. In the international market, Chinese companies give the impression of low prices and low quality, but this situation has changed. We have advanced technology and high-quality products, but it takes time to let customers know about us.

Zoomlion also said, "In order to enhance the international competitiveness of enterprises, better serve global users, and promote international development through localization, this year, Zoomlion will further optimize the layout of overseas platforms and strengthen information sharing and resource integration. Accelerate the construction of overseas manufacturing bases; and gradually build an overseas trading platform system, spare parts supply system, and logistics system, improve the international operation system; accelerate the construction of service outlets and service engineers, and improve overseas service capabilities and response speed."