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Construction : Report | November 2015 | Source : Equipment India

Growing Leaps and Bounds

LiuGong´s overseas business will be around 40 per cent of its total revenue in 2020.

When major activities are in operation, more international visitors than usual will appear at the LiuGong International Industrial Park in Liuzhou, a south-western city in China. They range from global dealers in the construction equipment industry, to end-users from across the world. Thanks to LiuGong´s increased efforts and achievements in globalising the company during the past dozen years, frequent influxes of foreign visitors has become the norm.

Global reach

This internationalisation and deep marketing network is evidenced by the fact that LiuGong has distributed its products to over 130 countries, from the developed to the developing. LiuGong has directly engaged in competition with global giants, penetrating the traditional markets of North America and European
enterprises with its lines of heavy equipment.

Zeng Guang´an has driven the success of LiuGong´s internationalisation, and is expecting its operations to continue growing on a global scale. At the end of 2014, he was promoted to Chairman of LiuGong Group and Guangxi LiuGong Machinery Co Ltd., allowing him to focus on the strategic development of the company and the industry within the Chinese and global markets. “China’s construction machinery market has been in decline for several years, but it is poised to change. LiuGong must adjust the position of its force, focus on the key point and open a brand new field,” said the Chairman.

Outside China, LiuGong is building strong bridgeheads. Howard Dale has be positioned as Vice President of LiuGong Dressta Machinery Co Ltd in Poland, and Chairman of LiuGong Machinery Europe B.V., having previously worked with Case Corporation for several years.

On June 15, 2015, LiuGong called a large and high-end product launch in Changzhou, the core base for LiuGong´s strategy in the East. Here, LiuGong successfully displayed the 8t and 12t H-Series wheel loaders; the 48t, 50t and 70t E-Series excavators; the TC550A and TC250A5 cranes; and the TD40E bulldozer. At the same time, 60 LiuGong excavators were distributed to clients on the American continent.

Having begun its internationalisation strategy in 2003, LiuGong has become an example to other enterprises in the Chinese CE industry, demonstrating its advantages in both overseas sale volume and the ratio of export products compared to its competitors. With such sustained and stable status and acceleration, and with the further deepening of overseas deployment, Zeng Guang´an predicted, “in 2020, international business will account for 40 per cent of LiuGong’s revenue.”

The company´s overseas sales volume accounts for one-third of LiuGong´s total revenue, and will undoubtedly contribute greater profits in the future. In fact, the overseas markets for some units – such as wheel loaders and cranes – have displayed greater development than in the domestic market.

The India story
One example would be LiuGong´s experience in India. Before the Indian manufacturing base went into operation, LiuGong conducted a two-year in-depth feasibility study, with Madhya Pradesh eventually chosen for its location. In July 2009, the Indian base went into operation after one year´s preparation and construction, making LiuGong the first Chinese construction corporation to set up a plant in India. At the opening ceremony, the Chief Minister of Madhya Pradesh asked Zeng Guang´an why he chose to set up the plant in India. Zeng Guang´an, painted with India´s traditional red symbol on his forehead, said without concealing his thoughts: “India is a market that possesses tremendous demand potentials and scales in the global context. In India, LiuGong is the leading force in the 5t-plus wheel loader market with a market share of over 60 per cent; 7 out of the top 10 contractors in India are LiuGong´s clients. In the future, India will become one of the backbones for LiuGong´s global development.”

Growth in Europe and America
LiuGong´s business in the advanced markets of Europe has developed too. Despite the Chinese market following a downward trend in 2012, LiuGong invested more than RMB 300 million to acquire HSW (Huta Stalowa Wola) Dressta in Poland. More than a year later, LiuGong Poland acquired all assets and technologies of ZZN Transmission Plant, a world-class drive system manufacturer and the core supplier of US General Electric Company.

Poland, where HSW Dressta is based, is the gateway to for LiuGong to succeed in Western Europe, where demand is becoming diversified and Chinese products are growing in acceptability and recognition. In addition, Poland is extremely cost-effective for Chinese corporations entering Europe. “With the synergistic effect from these aspects, the European business through HSW will bring LiuGong major breakthroughs in the European and American markets,” said Zeng Guang´an.

Alongside the achievements in Poland, LiuGong has constantly enhanced its presence in Europe through other channels, including attendance at the INTERMAT exhibition, and by collaborating with dealers in the Netherlands and Russia to frequently exhibit its products.

LiuGong´s most recent major global action was to establish a manufacturing plant in Brazil in March 2015, in an effort to penetrate the burgeoning South American market.

Morocco, the first destination of LiuGong “going overseas”, is regarded by Zeng Guang´an as the blessed place for internationalisation and he fondly remembers one experience in particular: “When we first met the local partners, there happened to be two wheel loaders — one was a famous brand from the US, and the other was from LiuGong. The machine from the US broke down and LiuGong product worked well all along.”

The Chairman of the biggest contractor and LiuGong´s first local agent in Morocco was 80 years old when he met Zeng Guang´an, but still lived the life of a man half his age. Paying a visit to the Chairman 10 years later, Zeng Guang´an found that the old man in his nineties still kept the same life and working habits. The Chairman told Zeng Guang´an to “hold steadfast to your conviction and go for it.” Zeng Guang´an said: “If other people have confidence in us, we must trust ourselves and make every effort to do our best.” It is this notion that continues to drive LiuGong´s development into one of the world´s leading manufacturers of construction equipment.

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