The busy BICES show reflects China’s booming infrastructure investment and growing economy – Mike Woof reports. The recent BICES trade show in capital Beijing was extremely busy, with high visitor attendance levels and crowded aisles. The interest in the event strongly reflects the country’s massive infrastructure growth, which continues to develop. The construction equipment business has been identified as a key economic priority by the Chinese Government, with manufacturers being offered numerous incentiv
The busy BICES show reflects China’s booming infrastructure investment and growing economy – Mike Woof reports
The recentThe construction equipment business has been identified as a key economic priority by the
Chinese products continue to gain in terms of quality and performance with the latest generation units showing huge improvements over those of only a few years ago. Of note is the fact that Chinese construction equipment manufacturers offer wide line-ups of machines with bigger ranges than the likes of either
The internal market for machinery is strong as China’s construction industry continues to expand at a ferocious rate. The pace of development is fast, as can be seen from the continuing highway construction programme as well as massive infrastructure investment. Key infrastructure projects are being designed and constructed to world-class levels too, such as innovative bridges spanning wide rivers and seaways or strategically important highways linking major airports for example.
Chinese companies are also looking to export and are developing bigger sales profiles around the world, particularly in emergent markets such as Africa, the Middle East and Latin America. For
Just as Chinese firms are looking to boost market share and sales in export markets, international firms are keen to develop sales and manufacturing capacity in China. Two major European manufacturers,
Sandvik Mining and Construction has bought Shanghai Jianshe Luqiao Machinery Co (SJL), a major Chinese manufacturer of crushing and screening equipment, which sells its products under the SHANBAO brand. Following the move the SHANBAO name will be retained and this will be used as a mid-price brand to be marketed alongside the premium Sandvik range.
The strategic acquisition of SJL will allow Sandvik to target a broader range of customers in developing nations and the SHANBAO brand will be sold into fast-growing markets where many customers favour mid-priced, quality brands. The SHANBAO range and the SJL manufacturing facilities will benefit from Sandvik’s technical input, while Sandvik will benefit from SJL’s strong share of the Chinese market. Thomas Schulz, president construction and senior vice president of Sandvik Mining and Construction said, “The owners of SJL were the power company Shanghai Electric with 75% and contractor China Road and Bridge with 25%. We have a joint venture agreement with Shanghai Electric, which retains 20% of SJL while Sandvik holds 80%.”
The reason for the acquisition is clear. The Chinese crushing and screening equipment market has seen growth of 10%/year in the last five years and is expected to grow 2-3 times over the next five years according to Schulz. He explained that while SJL will gain from Sandvik’s technical and manufacturing technology, the management of the company will however remain Chinese and the firm will be headed by Thomas Zhang. “SHANBAO will become the largest mid-market crushing and screening supplier in the world,” Zhang said. “The SHANBAO brand has a very strong reputation in this market.
Because of SHANBAO’s strength in the mid-priced crushing and screening machine market, Sandvik is keen to retain the name. The two brands will be kept separate though and Sandvik personnel will not market SHANBAO machines while the SJL team will not market those from Sandvik. Schulz added, “We are strong believers that such a transformation can only occur with Chinese managers at the company.”
The target for Sandvik’s growth worldwide is 9% but both Schulz and Zhang believe that SJL will see a faster expansion rate based on the strength of the Chinese market as well as that of other developing countries. In addition, SHANBAO is now looking for distributors to market its product range on the global stage, with the SHANBAO product range including jaw crushers, cone crushers, vertical crushers, impact crushers, screens and feeders, accessories and aftermarket.
French firm Fayat’s asphalt plant business
Another customer took advantage of the remote control capabilities of the Marini plants. The system was set-up on-site by technicians but the actual commissioning was carried out over 200km away in the owner’s office using a PC.
Cummins and Guangxi LiuGong Machinery have established a joint-venture partnership to manufacture mid-range engines at a new facility. The plant will be built in Liuzhou City, Guangxi Province, in southern China and the assembly of engines from kits will commence in 20120, while full production of engines will start during 2013. The joint-venture plans to make some 50,000 units/year, although the plant will have additional capacity should demand rise as anticipated. The Guangxi Cummins Industrial Power joint-venture will build mid-range Tier 2/Stage II and Tier 3/Stage IIIA emission compliant engines. The engines will be adapted for use in construction equipment usage to meet the demand of both LiuGong and other equipment manufacturers in China. Developing premium mid-range engines for China will help boost the country’s construction machinery manufacturing industry, which has a strong and growing demand for high performance, reliable engine power
