Introduction: Xugong merged with Shi Weiying, Sany Group swallowed Putzmeister, Zoomlion received CIFA, and the top three M&A companies in China's construction machinery industry are actually based on concrete. Is it because of their eyes? Interestingly, the old rivals of these three rivals have defined their M&A action as an important step in the internationalization strategy. Can the internationalization of construction machinery be slow?
In 2015, it sprinted its ambitious goal of operating revenue of 300 billion yuan, and strived to become one of the top three in the world of construction machinery.
This is the strategic goal of Xugong's "12th Five-Year Plan".
Upon hearing this news, some people may question that the total target of the "12th Five-Year Plan" for the construction machinery industry is that the sales scale will reach 900 billion yuan, and the average annual growth rate will be about 17%. And Sany Group, Zoomlion's "Twelfth Five-Year Plan" set the goal is to reach 300 billion yuan.
In that case, isn't the volume of the industry equally divided by these three companies? How can this be done?
“So independent innovation strategy and internationalization are the inevitable choices for Xugong.†Wang Min, chairman of the board of directors and party secretary of Xuzhou Construction Machinery Group Co., Ltd. (hereinafter abbreviated as Xugong), explained this to reporters.
Wang Min, the only way to go, said that the goal of this year is to firmly strike 100 billion yuan. "This big step, if you step forward, will be a smooth one in the future."
According to him, from April last year to now, the industry has been in a period of sharp decline and negative growth for 14 consecutive months. In the first quarter of this year, except for a slight increase in concrete machinery, the decline in the number of other major types of construction machinery hosts reached over 32%, and in April and May, they still hovered at this low range.
At the same time, in the first quarter of this year, XCMG under the global downturn of the construction machinery industry, the slowdown of domestic economic growth, and poor export situation, contrarian growth, achieving exports of 319 million US dollars, a year-on-year increase of 44%. In 2011, Xugong achieved an operating income of RMB 87.1 billion and a total export value of USD 1.08 billion, ranking fourth in the 2011 China Machinery Industry Top 100.
In fact, in the face of this unfavorable market environment, for the Sanyi Group and Zoomlion, which also have to strike a target of RMB 300 billion, RMB 100 billion is also a difficult step to overcome.
According to statistics from the China Federation of Machinery Industry, Xugong, Zoomlion, and Sanyi Group ranked 4-6 places of China's machinery industry last year with 87.1 billion yuan, 84.8 billion yuan, and 80.1 billion yuan.
For these three companies, the internationalization strategy will be an important engine to achieve the goal, and accelerating the deepening of the overseas market is their only way.
Zhan Chunxin, chairman of Zoomlion, believes that from the overall trend of the industry, Chinese construction machinery companies must go out. Only by "going out" can we break through the bottleneck and achieve an international transformation under the premise of effectively integrating global resources.
Now, Zoomlion’s world-class corporate goal is very clear. It is the top five global players in the next five years, and more than 50% of the products and sales are non-Chinese market. Zoomlion not only needs to be a world-class company, but has to be a world-class company with a high "gold content".
"In 2012, Sany Group's sales will exceed 100 billion yuan, of which the overseas market will account for 30% of the total," said Sany Heavy Industry President Xiang Wenbo. SANY's international strategy is: First, the product goes out to improve the rapid response capability of the brand and the international market; Secondly, the enterprise goes out and invests and sets up factories overseas; The third capital goes out through the international capital operation. To integrate international talents, capital, markets and other resources.
In three steps, in fact, the other two companies' internationalization strategy is basically taking the three steps of product export, overseas construction, and capital mergers and acquisitions.
Wang Min said: “Since the XCMG Group was founded 22 years ago, it was initially the product that went out and people went out. In recent years, the manufacturing base has gone out. Now it has acquired Schweings, and the internationalization of Xugong has achieved a beautiful triple jump.â€
Currently, XCMG products have been sold to 147 countries and regions in the world. Last year, export earnings rose 125% year-on-year, becoming China's first engineering machinery industry to export more than US$1 billion, and it also won US$740 million in exporting Venezuela projects. China's engineering machinery exports as the largest single.
From a horizontal perspective, the other two have done the same thing in almost the same time. For example, Sany Group acquired German Putzmeister company, which enjoys high reputation in the concrete machinery industry, in February this year. For four years ago, Zoomlion acquired the Italian CIFA, which ranks third in the global concrete machinery industry.
It seems that the three companies not only see the heroes in their strategic goals, but also look at their strategic actions.
The reason for this is that in recent years, the turnover of Chinese concrete leading companies has surpassed that of similar companies in Europe and the United States. The dominant position of European strong brands in the global traditional market has been shaken, and China has become the world's largest producer of concrete pumps. In addition, during the current downturn in the sales of construction machinery, concrete machinery has bucked the trend and is unique in both sales and new product development. For large and powerful construction machinery companies, if they can't dig up gold in such a booming market, they may be in a slower speed or even weaker in terms of speed.
Looking back at the development of the construction machinery industry in recent years, we can clearly feel the fierce market competition in the industry, but it is precisely in the context of increasing competition that has stimulated the endogenous resilience of companies in the industry.
For example, in the current scenario of a severe market downturn, construction machinery companies have intensified efforts to open up the international market and expand exports. From January to April this year, the output value increased by only 3.79% year-on-year, but export earnings increased by as much as 30.52% year-on-year.
Many of these outstanding companies are accelerating their upgrading to high-end technology. They have significantly increased R&D investment and experimental conditions in key areas, localized research and development of basic parts, basic processes and basic materials, and the development of international markets. consciousness.
Wang Min said that he won three strategic support points for XUJING: First, contribute directly to the sector a huge segment with billions of grades and excellent growth; Second, strategically, for XCMG in the country, global concrete machinery The market gains an important share, occupies an important position, and provides strong strategic coordination. Third, it promotes the overall internationalization of Xugong.
Innovation in the whole industry chain For the future growth of Chinese construction machinery exports, Su Zimeng, secretary general of the China Construction Machinery Industry Association, once stated that there will be three growth points in the export of construction machinery during the 12th Five-Year Plan period. First, the scale of the development of large-scale construction machinery will increase. Large-scale construction machinery has increased its export opportunities in emerging markets in developing countries; second, small- and medium-size models that have already been bulk exported. With the improvement of product technology and quality, the international regional market has become more stable, services are more in place, and the amount of exports has increased. Will continue to rise; Third, the current export value of parts and components has accounted for more than 30% of the total export value, but the added value of the products is very low. During the “Twelfth Five-Year Plan†period, it will support the policy of component products, so parts and components Export will become a new growth point.
In fact, key components, especially hydraulic components, have always been the soft underbelly of China's construction machinery industry. The annual import of key components is high. For this reason, although domestic construction machinery has developed rapidly in recent years, its expansion speed and ability to continue to develop have been subject to certain restrictions. For example, the commonly used A-type components in the construction machinery industry: that is, foreign companies die-cut technology, general-purpose, the most core components. For example, Komatsu's Class A parts are basically manufactured only in Japan.
Over the years, Class A parts have always been the biggest bottleneck in the development of domestic construction machinery. If only one valve, pump, and motor hydraulic system account for 15% to 20% of the value of a single excavator, not only is the price high, but also it is limited in supply. Whenever there is a volume expansion, it is always “snagged†by foreign companies.
For the construction machinery leader who wants to implement an internationalization strategy, if the key components are controlled by people, it is not a long-term solution. It is based on this understanding that leading domestic construction machinery leading companies such as Xugong, Sanyi and China United have all started to increase the research and development of components, especially hydraulic components.
Wang Min told reporters that Xugong’s strategy in the future is to insist on independent innovation and international “two-wheel driveâ€, and XCMG’s independent innovation will include organizational changes and structural adjustments. The focus of this round of change adjustment lies in the expansion and development of the product structure from the low-end-led product structure to the high-end, full-industry-chain product structure.
He emphasized that XCMG's independent innovation strategy refers not only to a dimension of technological innovation, but to comprehensive innovation covering the entire value chain and the entire industrial chain.
In the breakthrough of Class A components, XCMG has come out with a unique path of "Three Independents: Independent Innovation + M&A Digestion + Joint and Collaborative Innovation". Specifically: independent breakthroughs in high-end hydraulic cylinders, new gearboxes, high-end electronic control systems, four-wheel and other key technologies; with the acquisition of two companies from Europe and European R & D centers as a platform, from digestion, absorption and independent innovation Accelerate breakthroughs in core technologies such as valves, pumps, motors, and hydraulic systems. Joint ventures with multinational companies such as Germany, the United States, and South Korea have broken through slewing bearings, drive axles, engines, torque limiters, and other bottleneck technologies through joint and collaborative innovation.
The full-value-chain innovation penetration includes: pulling and infiltrating from the innovation of outsourcing enterprises around total quality improvement; the four major businesses of R&D, procurement, manufacturing, and marketing, and the profound transformation of the four major streams of material flow, capital flow, information flow, and control flow. Restructuring of operations and management and control models; comprehensive construction, improvement, and centralized management of post-market operations such as financial leasing, product leasing, second-hand mobile phone transactions, spare parts, logistics, and remanufacturing.
“This is a completely user-oriented brand-new value chain system that is presented to the market, and it is a brand-new management and control structure and business model under the framework of the world's top corporate standards,†said Wang Min.
In 2015, it sprinted its ambitious goal of operating revenue of 300 billion yuan, and strived to become one of the top three in the world of construction machinery.
This is the strategic goal of Xugong's "12th Five-Year Plan".
Upon hearing this news, some people may question that the total target of the "12th Five-Year Plan" for the construction machinery industry is that the sales scale will reach 900 billion yuan, and the average annual growth rate will be about 17%. And Sany Group, Zoomlion's "Twelfth Five-Year Plan" set the goal is to reach 300 billion yuan.
In that case, isn't the volume of the industry equally divided by these three companies? How can this be done?
“So independent innovation strategy and internationalization are the inevitable choices for Xugong.†Wang Min, chairman of the board of directors and party secretary of Xuzhou Construction Machinery Group Co., Ltd. (hereinafter abbreviated as Xugong), explained this to reporters.
Wang Min, the only way to go, said that the goal of this year is to firmly strike 100 billion yuan. "This big step, if you step forward, will be a smooth one in the future."
According to him, from April last year to now, the industry has been in a period of sharp decline and negative growth for 14 consecutive months. In the first quarter of this year, except for a slight increase in concrete machinery, the decline in the number of other major types of construction machinery hosts reached over 32%, and in April and May, they still hovered at this low range.
At the same time, in the first quarter of this year, XCMG under the global downturn of the construction machinery industry, the slowdown of domestic economic growth, and poor export situation, contrarian growth, achieving exports of 319 million US dollars, a year-on-year increase of 44%. In 2011, Xugong achieved an operating income of RMB 87.1 billion and a total export value of USD 1.08 billion, ranking fourth in the 2011 China Machinery Industry Top 100.
In fact, in the face of this unfavorable market environment, for the Sanyi Group and Zoomlion, which also have to strike a target of RMB 300 billion, RMB 100 billion is also a difficult step to overcome.
According to statistics from the China Federation of Machinery Industry, Xugong, Zoomlion, and Sanyi Group ranked 4-6 places of China's machinery industry last year with 87.1 billion yuan, 84.8 billion yuan, and 80.1 billion yuan.
For these three companies, the internationalization strategy will be an important engine to achieve the goal, and accelerating the deepening of the overseas market is their only way.
Zhan Chunxin, chairman of Zoomlion, believes that from the overall trend of the industry, Chinese construction machinery companies must go out. Only by "going out" can we break through the bottleneck and achieve an international transformation under the premise of effectively integrating global resources.
Now, Zoomlion’s world-class corporate goal is very clear. It is the top five global players in the next five years, and more than 50% of the products and sales are non-Chinese market. Zoomlion not only needs to be a world-class company, but has to be a world-class company with a high "gold content".
"In 2012, Sany Group's sales will exceed 100 billion yuan, of which the overseas market will account for 30% of the total," said Sany Heavy Industry President Xiang Wenbo. SANY's international strategy is: First, the product goes out to improve the rapid response capability of the brand and the international market; Secondly, the enterprise goes out and invests and sets up factories overseas; The third capital goes out through the international capital operation. To integrate international talents, capital, markets and other resources.
In three steps, in fact, the other two companies' internationalization strategy is basically taking the three steps of product export, overseas construction, and capital mergers and acquisitions.
Wang Min said: “Since the XCMG Group was founded 22 years ago, it was initially the product that went out and people went out. In recent years, the manufacturing base has gone out. Now it has acquired Schweings, and the internationalization of Xugong has achieved a beautiful triple jump.â€
Currently, XCMG products have been sold to 147 countries and regions in the world. Last year, export earnings rose 125% year-on-year, becoming China's first engineering machinery industry to export more than US$1 billion, and it also won US$740 million in exporting Venezuela projects. China's engineering machinery exports as the largest single.
From a horizontal perspective, the other two have done the same thing in almost the same time. For example, Sany Group acquired German Putzmeister company, which enjoys high reputation in the concrete machinery industry, in February this year. For four years ago, Zoomlion acquired the Italian CIFA, which ranks third in the global concrete machinery industry.
It seems that the three companies not only see the heroes in their strategic goals, but also look at their strategic actions.
The reason for this is that in recent years, the turnover of Chinese concrete leading companies has surpassed that of similar companies in Europe and the United States. The dominant position of European strong brands in the global traditional market has been shaken, and China has become the world's largest producer of concrete pumps. In addition, during the current downturn in the sales of construction machinery, concrete machinery has bucked the trend and is unique in both sales and new product development. For large and powerful construction machinery companies, if they can't dig up gold in such a booming market, they may be in a slower speed or even weaker in terms of speed.
Looking back at the development of the construction machinery industry in recent years, we can clearly feel the fierce market competition in the industry, but it is precisely in the context of increasing competition that has stimulated the endogenous resilience of companies in the industry.
For example, in the current scenario of a severe market downturn, construction machinery companies have intensified efforts to open up the international market and expand exports. From January to April this year, the output value increased by only 3.79% year-on-year, but export earnings increased by as much as 30.52% year-on-year.
Many of these outstanding companies are accelerating their upgrading to high-end technology. They have significantly increased R&D investment and experimental conditions in key areas, localized research and development of basic parts, basic processes and basic materials, and the development of international markets. consciousness.
Wang Min said that he won three strategic support points for XUJING: First, contribute directly to the sector a huge segment with billions of grades and excellent growth; Second, strategically, for XCMG in the country, global concrete machinery The market gains an important share, occupies an important position, and provides strong strategic coordination. Third, it promotes the overall internationalization of Xugong.
Innovation in the whole industry chain For the future growth of Chinese construction machinery exports, Su Zimeng, secretary general of the China Construction Machinery Industry Association, once stated that there will be three growth points in the export of construction machinery during the 12th Five-Year Plan period. First, the scale of the development of large-scale construction machinery will increase. Large-scale construction machinery has increased its export opportunities in emerging markets in developing countries; second, small- and medium-size models that have already been bulk exported. With the improvement of product technology and quality, the international regional market has become more stable, services are more in place, and the amount of exports has increased. Will continue to rise; Third, the current export value of parts and components has accounted for more than 30% of the total export value, but the added value of the products is very low. During the “Twelfth Five-Year Plan†period, it will support the policy of component products, so parts and components Export will become a new growth point.
In fact, key components, especially hydraulic components, have always been the soft underbelly of China's construction machinery industry. The annual import of key components is high. For this reason, although domestic construction machinery has developed rapidly in recent years, its expansion speed and ability to continue to develop have been subject to certain restrictions. For example, the commonly used A-type components in the construction machinery industry: that is, foreign companies die-cut technology, general-purpose, the most core components. For example, Komatsu's Class A parts are basically manufactured only in Japan.
Over the years, Class A parts have always been the biggest bottleneck in the development of domestic construction machinery. If only one valve, pump, and motor hydraulic system account for 15% to 20% of the value of a single excavator, not only is the price high, but also it is limited in supply. Whenever there is a volume expansion, it is always “snagged†by foreign companies.
For the construction machinery leader who wants to implement an internationalization strategy, if the key components are controlled by people, it is not a long-term solution. It is based on this understanding that leading domestic construction machinery leading companies such as Xugong, Sanyi and China United have all started to increase the research and development of components, especially hydraulic components.
Wang Min told reporters that Xugong’s strategy in the future is to insist on independent innovation and international “two-wheel driveâ€, and XCMG’s independent innovation will include organizational changes and structural adjustments. The focus of this round of change adjustment lies in the expansion and development of the product structure from the low-end-led product structure to the high-end, full-industry-chain product structure.
He emphasized that XCMG's independent innovation strategy refers not only to a dimension of technological innovation, but to comprehensive innovation covering the entire value chain and the entire industrial chain.
In the breakthrough of Class A components, XCMG has come out with a unique path of "Three Independents: Independent Innovation + M&A Digestion + Joint and Collaborative Innovation". Specifically: independent breakthroughs in high-end hydraulic cylinders, new gearboxes, high-end electronic control systems, four-wheel and other key technologies; with the acquisition of two companies from Europe and European R & D centers as a platform, from digestion, absorption and independent innovation Accelerate breakthroughs in core technologies such as valves, pumps, motors, and hydraulic systems. Joint ventures with multinational companies such as Germany, the United States, and South Korea have broken through slewing bearings, drive axles, engines, torque limiters, and other bottleneck technologies through joint and collaborative innovation.
The full-value-chain innovation penetration includes: pulling and infiltrating from the innovation of outsourcing enterprises around total quality improvement; the four major businesses of R&D, procurement, manufacturing, and marketing, and the profound transformation of the four major streams of material flow, capital flow, information flow, and control flow. Restructuring of operations and management and control models; comprehensive construction, improvement, and centralized management of post-market operations such as financial leasing, product leasing, second-hand mobile phone transactions, spare parts, logistics, and remanufacturing.
“This is a completely user-oriented brand-new value chain system that is presented to the market, and it is a brand-new management and control structure and business model under the framework of the world's top corporate standards,†said Wang Min.
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