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Enterprises reach overseas for expansion

By Dong Jidong and Zhang Xiaomin | China Daily | Updated: 2015-03-26 07:33

The coastal city Dalian in Liaoning province has made great strides in helping its enterprises tap overseas markets, according to an official with the city government.

By October last year, Dalian enterprises had completed 99 overseas acquisitions with a total investment of $995 million, said Li Yunsheng, deputy director of the city's economy and information technology commission.

The nation's "going out" strategy has encouraged more Dalian enterprises to participate in international competition and improve their strength through integrating their resources, Li said.

 Enterprises reach overseas for expansion

The Dalian Machine Tool Group booth at the 2014 Beijing Machine Tool Exhibition.

In 2014, Dalian TDC Cutting Tools Inc acquired Manigley AG, a Swiss tool producer founded in 1918.

"The acquisition will increase our annual sales by 350 million yuan ($56 million) and narrow our technology gap with advanced producers in the world," said Qi Shumin, chairman of TDC.

Since it was founded 20 years ago, TDC has developed into one of the top global producers of cutting tools.

It makes 300 million tools and 10 million meters of bi-metal saw blades annually. It manufactures 20 percent of the industrial-grade high-speed steel drills in the world.

The company has expanded enormously through more than 20 acquisitions.

In 2008 and 2009, it acquired Werko GmbH of Germany and Greenfield Industries of the United States, both world-famous makers of cutting tools.

The company's sales increased seven times after the two acquisitions.

Today 90 percent of its products are exported to developed countries and regions including Europe and the US.

Through overseas acquisitions, the company not only gained advanced equipment and technologies but also recruited top-notch research personnel and marketing talent, Qi said.

The move has greatly enhanced the company's development of innovations, he noted.

Another manufacturer in the city, Dalian Machine Tool Group, has also made great progress in tapping international markets through overseas acquisitions and joint ventures. Its products are available in more than 100 countries and regions thanks to its global marketing network.

One of the top players in China's machine tool industry, DMTG is also planning to build factories overseas and seek new sources of growth, said Zhao Hong'an, deputy chief engineer of the company.

In 2013, Wafangdian Bearing Group Corp, also known as ZWZ, acquired KRW Leipzig GmbH.

Founded in 1904, Leipzig-based KRW owns six global leading technologies and more than 200 agencies.

It has great potential for rapid development despite short-term difficulties during the global financial crisis, said Cong Hong, chairman of ZWZ. The Dalian company spent several years investigating 37 enterprises around the world and chose to acquire KRW because it is highly complementary, he added.

The Dalian city government helped the acquisition gain support from the local government in Germany, while ZWZ found the best financing channel with the help of the Dalian commission of economy and information technology.

As part of city government's efforts to create a sound environment for enterprises to tap overseas markets, the Dalian National Tax Bureau held training sessions on tax risks in foreign countries.

The bureau has held sessions on tax policies of 165 countries and regions for more than 200 enterprises, said Wang Yu, deputy director of the corporate income tax office at the bureau.

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(China Daily 03/26/2015 page6)

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