Chinese manufacturer Shantui is expanding its operations with a more diverse range of products – Mike Woof reports
Chinese manufacturer Shantui is reorganising its operations to cope with the current tough market conditions, taking a long term view that is geared for future growth. The firm has expanded its operations significantly, broadening its product line away from its reliance on the bulldozer business where it has its origins. Demand for concrete equipment has been strong in China and the firm saw t
Chinese manufacturer Shantui is expanding its operations with a more diverse range of products – Mike Woof reports
Will Zhu is vice general manager at Shantui and he said, “Five years ago we bought a concrete machinery business in Wuhan, Hebei Province.”
He said that
He explained, “We established a new company to sell the concrete machines in the domestic market and overseas.” And Zhu added that that this operation focuses on the mixer trucks, batching plants and concrete pumps, “…we got good profits.”
Having seen this set up achieve strong sales despite the competition from its major rivals, Shantui is keen to broaden this approach across its business. Zhu said, “We want to use this model for other markets. It’s the next step,” and he added that the firm intends to introduce the strategy for other product ranges being sold into parts of Asia and Latin America, which are amongst its strongest export markets.
The North American and European markets are ones in which Shantui has, as yet, a comparatively small presence. The firm has supplied some dozers into Canada and Europe for instance, with only 96kW and 119kW hydrostatic drive dozers and some excavators being offered with the necessary low emission diesels. The company is testing a 164kW
Meanwhile Shantui’s parts business has become a crucial component in its operations and the firm is a major supplier to other OEMs. The company used to import spares from Japan through its relationship with
Shantui’s most successful export markets have been Latin America and Africa and the company has benefited from a strong performance in recent months in Cuba and Venezuela. In all, 125 units are being shipped to Cuba, with this package including excavators, wheeled loaders, dozers and concrete machines. Meanwhile the supply deal for Venezuela is larger still and accounts for some 500 machines in all, even bigger than the 300 unit order that Shantui supplied to Venezuela some years ago. Again in Latin America, Ecuador is another market where Shantui has high hopes and Zhu said, “Our dealer has already set up a new facility to sell machines directly.”
Brazil however is not such a good market for the firm at present as demand has fallen. Between 2007 and 2011 Shantui sold 500 machines in Brazil but market confidence is not as strong as it was. Coupled with the country’s high import duties, this has affected Shantui’s sales. Zhu said, “For this market we still have plans to establish a subsidiary but it depends on the Brazilian economy. We were planning to establish a factory in Brazil.” Zhu explained that the plant would be set up as a joint venture with a local firm and would assemble machines, helping reduce the high import duties. However until the Brazilian economy improves once more, the firm’s plans for a factory have been put on hold.
