Sany Heavy Industry's construction machinery and equipment is constructed on site at the Mont-Netrad Railway in Kenya (network photo)

Not long ago, the international standards for the concrete and mortar preparation machinery and equipment industry compiled by Zoomlion Heavy Industry Co., Ltd. were officially issued, becoming the first international standard in the global engineering machinery industry led by China and officially published. Industry insiders pointed out that the publication and distribution of this standard will not only help promote the technological progress and international cooperation of such machinery and equipment, but will also help China's engineering machinery industry gain more recognition from its peers at home and abroad. It can be said that the process of China's engineering machinery industry from "apprentice" to "master" is also the process of China's continuous opening up to the outside world. In the future, with the continuous improvement of China's manufacturing strength and the further opening of its business model, China's construction machinery will contribute more to the world's transformation of nature.

Not willing to fall behind in the face of competition

The development of human society is inseparable from the use of natural resources and the transformation of the natural environment. In this process, engineering machinery widely used in construction in buildings, water conservancy, roads, mines, ports and other fields undoubtedly enables humans to gain the ability to surpass their own physical functions in transforming the natural environment. Therefore, the manufacturing level and production capacity of construction machinery have always been regarded as key indicators for measuring a country's industrial level. Thailand's National Railway Station, Kenya's Mombasa Railway, Brunei's Cross-Sea Bridge... Nowadays, among the many super projects of the "Belt and Road", there are Chinese engineering machinery products.

The sharp edge of the sword comes from sharpening, and the fragrance of plum blossoms comes from the bitter cold. At the beginning of reform and opening up, although China had established a relatively complete industrial system, it was still in a relatively backward state in the field of engineering machinery that covers a wide range, has a large demand and a wide variety. In the early 1990s, when the construction waves were surging in China, the construction machinery market was filled with a large number of "foreign brands". At that time, Caterpillar, the United States, which was good at producing excavators and mining equipment, Komatsu, Japan, which had obvious advantages in bulldozers, forklifts, shield machines, etc., and Volvo Group, which was good at self-propelled graders, road rollers, and mining trucks, all achieved rapid development in the Chinese market.

Openness will inevitably lead to competition. It is gratifying that Chinese domestic engineering machinery practitioners are neither afraid of the competition brought about by opening up, nor are they willing to fall behind, but are catching up. In 1992, Zhan Chunxin, then deputy director of the Changsha Construction Machinery Research Institute of the Ministry of Construction, led seven technical personnel to borrow 500,000 yuan to establish the "Zhonglian Construction Machinery Industry Company" integrating science, industry and trade, and began to explore the path of reform of the scientific research system. At that time, the overseas brand market share of concrete conveying pump product was as high as 95%, but in Zhan Chunxin's eyes, this was a market with huge potential for domestic brands.

Electric-driven off-highway mining dump truck produced by Inner Mongolia Northern Heavy Duty Automobile Co., Ltd. (Photo source: Photo by Song Peng from Overseas Network)

In 1993, my country's first generation of concrete conveying pumps with completely independent intellectual property rights were born in Zoomlion, and it achieved sales profits that year. However, since Zhonglian just began to convert drawings into products and lacked technical experience, the sold concrete conveying pumps had quality problems at one time, and technicians kept "extinguishing fires". Therefore, Zhan Chunxin decisively decided to suspend production in full, and after in-depth on-site investigation, he made comprehensive modifications and redesigns of the product. After the efforts of technicians, the new generation of products has finally been launched, and Zhonglian replaced 10 old products sold in the early stage for free. From then on, Zoomlion's development path became wider and wider.

The first intelligent asphalt spreader, the first rubber powder modified asphalt equipment, the first self-propelled gravel spreader, the first thermal oil heating on-site cold regeneration machine... Although it is different from giants such as Zoomlion Heavy Industry, as a professional manufacturer of pavement construction machinery, Xi'an Dagang Road Machinery Co., Ltd. has also regarded technology as the foundation of survival since its establishment. It not only created many "domestic firsts", but now its products are exported to more than 50 countries and regions overseas.

Time is right to go overseas mergers and acquisitions

With the continuous deepening of China's construction boom, a group of excellent construction machinery companies have gained a foothold in the country. At the same time, due to the relatively saturated construction market in many developed countries, some high-quality construction machinery manufacturers suffer from insufficient demand and high costs. At this time, overseas investment and mergers and acquisitions became the latest choice for the open development of many domestic engineering machinery giants.

Polish HSW is the largest engineering machinery manufacturer in Central and Eastern Europe. Its full range of bulldozers produced by it is the world-leading and has cultivated a large number of high-level industry talents. Late at night on January 31, 2012, after 22 months of arduous negotiations, Guangxi Liugong Machinery Co., Ltd. officially became the new owner of HSW civil engineering machinery business unit.

As the world's largest loader manufacturer, Liugong's assembly workshop has a construction machinery equipment offline every 7 minutes. After taking over HSW, Liugong's Polish management team immediately established several special teams, which were responsible for the improvement and optimization of lean production, procurement, R&D, human resources, IT management systems, etc. Not only did the efficiency be greatly improved and the cost was significantly reduced, but the Liugong brand excavators and loaders were introduced into Poland and successfully launched in less than 3 months. HSW company experienced an industry miracle of turning losses into profits in the early stages of the acquisition, and Liugong was highly recognized by international peers.

Workers from Shandong Lingong Engineering Machinery Co., Ltd. operate on the loader production line. (Photo source: Photo by Guo Xulei, Xinhua News Agency)

Coincidentally, XCMG has also actively carried out overseas mergers and acquisitions of high-quality European and American engineering machinery companies such as Schweiying, Germany, in recent years. At the same time, XCMG Group has also continuously increased its pace of direct investment in overseas factories to better integrate overseas resources and lay out the global market. Now, XCMG Group's "going out" strategy has gradually gained practical results: several overseas R&D centers and assembly plants have been put into production one after another, with products covering 177 countries and regions, and more than 280 overseas agents providing marketing services... From January to May 2017, XCMG's brand exports exceeded 2.4 billion yuan, a year-on-year increase of 94.18%. Its market share in Brazil, Russia, Central Asia, the Middle East and other countries continues to rank among the top three international brands.

"In recent years, China's engineering machinery industry has made great progress in independent research and development and cutting-edge technological innovation. Many excellent domestic engineering machinery companies actively go overseas to acquire high-quality peers or parts suppliers after they reach a certain stage of development. In essence, it is a natural issue of open development. Overseas mergers and acquisitions can help Chinese engineering machinery companies get rid of the protectionism and technical barriers faced by relying solely on the trade method to expand overseas markets. On the other hand, it helps Chinese engineering machinery companies directly integrate the technical accumulation, sales channels, industrial talents and other advantageous resources of overseas high-quality enterprises, thereby enhancing the international competitiveness of Chinese enterprises." Zhou Minliang, a researcher at the Institute of Industrial Economics of the Chinese Academy of Social Sciences, said in an interview with our reporter.

Integration advantages to the world

Nowadays, there are more and more Chinese engineering machinery companies that dare to make overseas layouts and are good at overseas cooperation, and "apprentices" are gradually growing into "masters". Inner Mongolia Northern Heavy Duty Automobile Co., Ltd. (hereinafter referred to as "Northern Co., Ltd.") was established in 1988 by a Sino-foreign joint venture. It is an enterprise specializing in the production and research and development of non-highway mining dump trucks, related construction machinery and its parts. In 2012, a mine in the western part of the Republic of Namibia in Africa needed to purchase a batch of 330-ton electric wheel mine cars, which gave Northern Shares a chance to expand the African market.

However, in the global mining vehicle field, foreign giants represented by Caterpillar, the United States and Komatsu, Japan, account for 70%-80% of the market share. The strong brand and technical strength of these giants makes it difficult for other companies to reach. To this end, Northern Co., Ltd. took advantage of its joint venture advantage and first conducted in-depth communication and exchanges with German Siemens on high-power drive technology, solving the application of dual energy technology in large-tonnage electric wheel mining vehicles. After nearly 10 months of joint research and development, the first large-tonnage electric wheel mining vehicle in China that uses wire-mounted technology has finally been born. In the subsequent distribution process, Northern Co., Ltd. faced the doubts about Chinese companies in terms of intellectual property rights, construction period guarantees, bidding procedures, etc., and actively integrated domestic and foreign advantageous resources. It repeatedly conducted dozens of technical exchanges with foreign technical teams. Finally, it conquered the other party with rigorous data comparison and fine after-sales service plans, filling the gap in my country's high-end heavy mining vehicles participating in the construction of world-class mining projects.