SANY looks to make heavy impact
Updated: 2011-08-05 17:35
By Tan Yingzi (China Daily)
Tang Jianguo, president of SANY America, says private companies can better serve the overseas market than State-owned ones.[Photo / China Daily]
As the largest heavy equipment manufacturer in China, SANY, which recently placed in the Financial Times Global 500 List, is seeking an ambitious goal.
The $60 million project will be the headquarters of SANY America, the subsidiary of the Chinese company. The new campus will house SANY America's research and development team as well as a 360,000 square foot manufacturing area for the company's high-end concrete pump trucks and crawler cranes.
"After the company went public in 2003 on the Shanghai Stock Exchange, we entered a new phase of development which required us to explore more resources worldwide," Tang Jianguo, president of SANY America, told China Daily in his temporary office near the campus.
"We, of course, look at the United States, because it is the home to the leading heavy equipment manufacturers and it has the best technology, talent and market. And eventually the whole company can benefit from the US investment, upgrading our technology and management level and gaining more access to international market."
In 2006, SANY President Liang Wengen and other executives spent three weeks in America to study the market.
After visiting clients and talking with several local governments, they decided to set up their American branch in Georgia due to its central location, low cost of business operation and convenient transportation.
According to the agreement with the local government, SANY will invest in 228 acres and more than $100 million to create and establish a state-of-the-art manufacturing facility constructing and engineering SANY products for the North America market.
It is expected to create about 600 jobs for the local people.
SANY America currently employs 108 people and expects to double its staff members by the end of 2012.
Though the welcoming local government gives a lot of assistance to the Chinese company, Tang, who holds a MBA degree from a British university, found it very tough in the beginning to do business in a foreign country, especially when dealing with the complicated state or federal laws.
"It is really a new thing for Chinese enterprises to invest overseas and we can hardly follow any model," he said.
The company met a problem when it wanted to add a dormitory building on the manufacturing compound, which was "very normal" in China, Tang said, but in the US, it would involve the change of the purpose of the land use.
The president hired a lawyer, spent four months and attended three public hearings to go through the "exhausting" procedure.
"We had thought it would be very easy to change it (the purpose of the land use) as we do in China," he said.
"It takes time for us to get to know the US business practice."
Another problem for SANY America is branding as the Chinese manufacturer is still not a familiar name to the US dealers.
"We need people here to know us," Tang said.
His branding plan will include attending large exhibitions, participating in the government procurement bidding and sponsoring charity events.
Despite the tough start, Tang believes SANY America will be a success in the US market with SANY's strong research and manufacturing ability. In addition, he said that private companies like SANY can better serve the overseas market than the State-owned ones because they may respond faster to market demand.
The head of the American branch believed that SANY's global expansion will accelerate the company's development.
"Presently, we rank 431st on the list (FT Global 500) and we project that placement to move much, much higher as our new R&D and manufacturing facility comes online in Peachtree City," he said in the company's news release.
Many people believe that localization is the key to success in an overseas market, but Greg Trainer, vice-president of SANY America's Crawler Crane Division, said it is also important to have a strong Chinese leadership at an overseas branch which can have solid communication with the headquarters.
Trainer, who used to work for a Japanese automaker, knows how adaptive American workers can be in a totally foreign culture.
"Chinese companies should be willing to pay American professionals world-class price in order to get the best employees," he told China Daily.
"As long as the company is moving very fast, people will join you."
Citing that SANY has grown at an annualized rate of 50 percent for the past decade, he believed that it can enter into the top 100 companies measured in terms of market capitalization within the next three to five years.
"SANY has the formula for success in the American heavy equipment industry," he said in a recent news release.
In order to help American workers enhance the understanding of the company culture and build a tie with China, everyone, including the receptionists, will have a two-week tour to the Chinese headquarters in Changsha, Hunan province, and some famous historical sites.
He praised SANY for picking a right time to enter the US market.
"It is the best time to enter the US market for Chinese companies," he said. "In Atlanta, other Asian companies, such as Japanese ones, are suffering a lot from the financial crisis, and the local government is eager to get new investment and create new jobs. The general public is very welcoming towards foreign investors now."
China is Georgia's second-largest export destination behind Canada at $2.39 billion in 2010, growing 632 percent over the last decade, according to the latest report from US-China Business Council.
SANY is the third major Chinese company to build operations in the US, following a food machinery producer and an electrical products manufacturer.