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TRENDS AND TIDBITS continued from page 77 Major Domestic Manufacturers Accelerating Their Overseas Expansion in Developed Markets After weathering more than two years of weak domestic sales and struggling with excess capacity, China's construction machinery market is set for a recovery in 2014, fueled by increasing overseas demand. Su Zimeng, secretary-general of the Beijing-based China Construction Machinery Association, said that conditions are stabilizing. He noted that all major domestic companies in the sector are accelerating their overseas expansion and making large acquisitions in developed markets. Heavy equipment producers' sales volume was up just 2.98 percent last year at 562.6 billion yuan ($91.81 billion), well below the 21.7-percent increase in 2010. The sector was a huge beneficiary of the government's 2008 stimulus package of 4 trillion yuan and the ensuing infrastructure boom. But without follow-on investment, companies in the sector have found it tough going to maintain sales. Zeng Guang'an, president of Guangxi Liugong Group, one of the largest companies in the business, noted that the company had shut its Tianjin plant. That move is helping it avoid excess production and inventories and maintain its cash flow. The Liuzhou-based company this month completed the acquisition of Poland's Huta Stalowa Wola and its distribution subsidiary, Dressta Co Ltd, for 335 million yuan. The Polish company is a technological leader in producing high-end crawler dozers, which are tracked machines that use front-mounted blades to move material. Liugong's sales rose 6 percent last year to $2.03 billion. The company also plans to establish a new department in the first half of 2014 to develop mining machinery specifically for resource-rich markets such as Zambia, Tanzania, Tajikistan and Australia. The company aims to raise the share of international business from 30 percent now to 50 percent in its total business operations by 2015. "In African and South American markets, mining machinery is largely needed to develop mines, harness forest resources and work on hydro and road projects," Zeng said. "We also wish to expand our product line to include wind power and coal chemical equipment, because a number of our market destinations are rich in both resources." Zhan Chunxin, president of Zoomlion Heavy Industry Science and Technology IDA UNIVERSAL November-December 2013 Development Co, the world's sixth-largest construction machinery maker by sales value, said that his company will shift focus from excavators, bulldozers and pipe-layers to agricultural machinery, heavy trucks and public service vehicles. The company aims to sell these products in the domestic and foreign markets. A factory to produce wheel loaders and excavators was established in India last year, and the company is building another plant in Brazil. Zhan is also considering setting up factories in Russia and South Africa to expand the company's business channels to Eastern Europe, Central Asia and sub-Saharan Africa over the next three years. "To avoid mounting trade barriers across the world, building factories overseas is a useful strategy. It also reduces logistics costs and establishes an enhanced dealership network in those emerging markets, where demand remains high and encouraging," said Zhan. The Changsha-based company posted a profit of $1.43 billion in 2012. ● www.ecns.cn/business, oct 17 2013 Trends continued on page 83 81