Issue link: https://read.dmtmag.com/i/73372
He Qinghua, chairman of Sunward, says the fi rm is look- ing for possible overseas merg- ers and acquisitions; Zoomlion president Zhan Chunxin says it invests 5 percent of annual revenue in research and devel- opment. Provided to China Daily Changsha's heavy equip- in the world and one of the most important customers and a close partner of Mercedes- Benz trucks in China. "We have very good He Qinghua ment manufacturers brace themselves for new economic challenges. Th e ground for doing business is moving for the construction machinery industry centered in Chang- sha in Central China. Robert Veit, executive vice-president of Daimler Truck China, has noticed it. Every couple of months, he spends a few days in the Hunan provincial capital meeting people from the Zoomlion Heavy Industry Science & Technology Devel- opment Co, the second largest construction machinery maker cooperation with some major Changsha-based construction machinery manufacturers, such as Zoomlion. Over the years, our cooperation has grown far beyond a pure customer- supplier relationship to a closer partner- ship. We jointly develop products suiting their specifi c requirements, which values the technology innovation," Veit says. Construction machinery companies hope improving the standard of their products will help them expand. And they are doing it by merging with established specialized manu- facturers in other countries, and through research and development. Th ese changes in strategy come as a result of a slowing down of the Chinese economy and new opportunities in international markets. Aſt er enjoying average annual sales increases of 30 percent in recent years, sales of construc- tion machinery fell in the fi rst quarter of this year, according to the China Construction Machinery Association. Th ere was a 40.6 percent year-on-year decrease in the sale of excava- tors and a 48.4 percent drop in the demand for rollers. Two-thirds of such machines in China are made in Changsha, home to three of the biggest movers in the industry - Sany, Zoomlion and Sunward. Each continues to expand and develop internationally and domestically. Zoomlion formed a joint venture with Powermole International Ltd of Britain back in 2001. In 2008, it teamed up with Compagnia Italiana Forme Acciaio, which has a 20 percent market share in Western Europe and ranks third in the global con- crete machinery sector. Sany Heavy Industry paid 360 million euros ($475 mil- lion) this January for German concrete-pump maker Putz- meister Holding to add tech- nology and expand overseas. As a measure of how far the Chinese arm of the indus- try has extended, the number of Euro- pean buyers for the Changsha manu- facturers' products increased at the INTERMAT expo held in Paris in April. "Th e expo revealed that Chinese-made machinery is becom- IDA UNIVERSAL July-August 2012 ing more competitive in over- seas markets, as an increasing number of European clients are showing a preference for our products," says Zhan Chunxin, president of Zoomlion. He Qinghua says he also has been talking to European companies about possible M&A opportunities to grow his com- pany's R&D and sales network. Sunward has developed more than 100 specifi cations of high performance, high quality prod- ucts which have been exported to more than 60 countries and regions across the world. He says Sunward's annual sales are expected to reach 20 billion yuan by 2015, and 15 to 20 percent will come from the overseas market. Currently, the emerging market of Brazil accounts for most of its over- seas sales. Zhao Yuesi, director of the Changsha Commission of Industry and Information Technology, says the estab- lished markets in Europe and the United States accounted for 10 percent of Changsha's 54 billion yuan of construction equipment exports last year, and there was still a lot of Continued on page 49 47