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Guangxi Liugong Group eyes worldwide growth

By Song Mengxing | chinadaily.com.cn | Updated: 2019-03-15 10:17

Guangxi Liugong Group, one of the nation's largest industrial engineering companies, has actively integrated its expansion plans into the Belt and Road Initiative and made internationalization a key orientation in its development, the company's executives said.

The executives said the initiative has brought Chinese enterprises many development opportunities. Countries and regions involved in the initiative have a big demand for infrastructure construction, which represents a huge opportunity for engineering machinery companies, they said.

Guangxi Liugong boasts globally leading product lines, involving 13 categories such as excavation, shovel, lifting, industrial vehicles, road construction and maintenance and concrete machinery. It can provide good solutions, product portfolio support and after-sales support service for transportation and infrastructure construction projects.

The company has 120 distributors, six parts centers and six training centers in countries and regions involved in the initiative. Its products include loading machines, excavators and road rollers, which are manufactured in China, India, Poland and Brazil. Its income from the countries and regions involved in the initiative accounted for 65 percent of its overseas income last year.

Guangxi Liugong plans to consolidate the localization operation network in key countries by setting up businesses for direct sales in the countries and improving regional business centers in India. Executives are also considering business mode innovation, exploring financing and cross-border leasing

A manager speaks during a skill competition at Liugong Group. [Photo by Liao Qinggan/Provided to chinadaily.com.cn]

Internationalization has long been at the core of Guangxi Liugong's operation. Last year, the company seized the opportunity created by the recovery of the international engineering machinery market and its overseas sales income saw a year-on-year rise of 30 percent.

It now owns nine marketing subsidiaries, nine regional parts centers and more than 200 distributors overseas, covering 100-plus countries and regions.

Guangxi Liugong's branches in India fully used local manufacturing capabilities and an advantaged product mix in 2018, increasing its sales volume there by 50 percent year-on-year. Its factories in Poland have gradually become the main supply centers for the European market.

Its Brazilian plants further increased production of loading machines and excavators to support sales in that local market. The 835H FINAME loader has passed reliability verification and begun small-batch production.

Workers conduct routine inspection at Liugong Group. [Photo by Wu Qijun/Provided to chinadaily.com.cn]

Executives said the company adheres to its "4K" strategy, which refers to key regions, key distributors, key products and key clients, focuses on 20 key countries and products and launches new products based on different regions' particular features.

In 2018, sales volume in 20 key countries accounted for nearly 70 percent of the company's total overseas sales and the revenue created by these sales accounted for about two thirds of the total overseas revenue.

Internationalization is necessary for Guangxi Liugong to survive and grow, said Zeng Guang'an, the company's chairman, adding that overseas marketing, factory building and operations abroad and international mergers and acquisitions are all an indispensable part of the same strategy.

From 2003 to 2010, Guangxi Liugong founded eight overseas marketing service headquarters and built a global marketing service network involving more than 200 foreign agents, covering 130-plus countries. Some of the company's European and American counterparts spent nearly half a century achieving that goal, the chairman said.

The factory of Liugong Group. [Photo provided to chinadaily.com.cn]

In 2009, Guangxi Liugong's first overseas plant, which is located in India, came into operation. It is also the first plant built by the Chinese in South Asia, laying the foundation for the company's "Made in India" products' leading position in South Asian market.

Guangxi Liugong began manufacturing in the European Union with the establishment of its Poland factory in 2012. The company's European headquarters has been built in Warsaw and loaders and excavators that meet EU's technical quality standards are mass-produced in Poland. The products have gradually been recognized by local clients, the chairman said.

In 2012, China's engineering machinery market suddenly took a turn for the worse. Guangxi Liugong responded quickly and strategically, spending a great deal of money building a globally leading earthwork machinery engineering center and global engineering machinery research and development test facilities.

It has successfully developed the first vertical lifting loader, strategically integrated and closed plants and restructured its domestic marketing system. The plants in Brazil and Argentina have come into operation.

The development of emerging sectors — agricultural machinery and robotic business — should lead Guangxi Liugong to an even more prosperous future, the chairman said.

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