LiuGong 900E excavators “very key” for company future
David Beatenbough, vice president Liugong R&D, and Zeng Guang'an, vice chairman and president of Liugong, have talked about the company's ambitious plans to increase its market share
A senior LiuGong figure says the company’s keenly awaited 900E Series excavator is a “very key” model for its future.
Dave Beatenbough, vice president of the Chinese construction equipment manufacturing giant’s research and development arm, said production of the model at LiuGong’s Dressta base in Poland was expected to begin “within three months”.
“We see a lot of advantages in the 900E Series. It’s going to be a very key model for LiuGong’s future,” he exclaimed.
“This year we will probably build 200 machines. In 2014, I would expect we’d be producing 500 units. As Zeng Guang’an, LiuGong vice chairman and president, said at the company’s bauma 2013 press conference, we would like to produce 3,000 units per year. I think that’s a reasonable short to medium-term capacity number. Whether we have that in five or six years, I don’t know.”
Of the progress made with LiuGong’s Dressta subsidiary, Beatenbough said, “We acquired Dressta because we wanted a full line of bulldozers; we got that.
Secondly, we wanted a European production base; we got that. Thirdly, we wanted a very highly skilled workforce that understands construction machinery and understands quality. The fourth reason for me, selfishly, was that we wanted a good strong R&D team.
“When we got hold of Dressta it was a tired company. It had just come through the downturn and was not capable of recovering completely. The dealers were tired. Everybody was tired. There was no new investment to rebuild things. Within pretty short order, we were able to make significant improvements in productivity, the efficiency from the manufacturing side in particular. That work continues.”
Beatenbough said LiuGong Poland is expected to be a strong part of LiuGong, with a factory constantly working at capacity. “We’re going to get to that capacity by increasing bulldozer and pipelayer sales, but also by producing LiuGong technology machines in Poland for sale in the surrounding markets,” he added.
Although most of the current wheeled loader and excavator production in Poland is for the CIS and Russia, he explained, in future LiuGong expects manufacturing output at the factory to supply more of Europe.
He said LiuGong wanted to double, or perhaps triple, machine production in Poland “within five years”. That would also represent, said Beatenbough, a seven or eight time increase on 2011 production levels, before LiuGong bought the factory.
The quality and capability of LiuGong’s near 1,000 engineers had “improved tremendously” in the last five years, said Beatenbough, supporting the firm’s research and development ambitions.
“Our engineers spend a lot of time visiting the market. We have engineers in almost every country we sell in. Every year we send people to the markets and they bring information back. They’re learning how to assemble that information into sensible product plans. We’ve introduced the LiuGong Development Process. One of the key elements of that progress is developing product definition. This was a very big learning experience for LiuGong.”
Beatenbough said product definition is explaining what is and isn’t going to be included in a new model, defining its specifications, options available for it, and the expected life of the machine. “The only way to do a good product definition is to go out and talk to people,” he added.
At the press conference company president Guang’an talked about the progress of the company’s joint venture with leading engine manufacturer Cummins and driveline specialists ZF.
Guang’an said that a joint venture with leading manufacturers of electronic controls were among other joint ventures that would interest LiuGong, but stressed that no deal was imminent.
While Beatenbough says Brazil is one of several countries where LiuGong is looking to open new production facilities, he added that there were no plans to open new sites anywhere in the world in 2013 into 2014.
“We match our expansion in the markets pretty closely to our growth plans. We don’t go out and just buy something to be bigger. But if it fits, and if it matches a sensible strategy, then we will invest in manufacturing and support facilities,” he said.
The company has cut back working hours in its 19 Chinese factories due to the current flat domestic sales market.
“Everybody is well aware that last year was down considerably – 30-35% – and the first quarter of 2013 was down 20%,” said Beatenbough. “But we have seen that March  was the first month in about 18 months where year-on-year there was an increase. One month is not enough to make a trend, but at least there’s an indication of growth. I don’t think there’ll be tremendous growth this year, maybe 5 maybe 10%.”