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13 November 2014

Export focus for XCMG, with Latin America as key territory

First publishedin bauma China
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bauma China 2014 Preview XCMG crane
In the crane sector, XCMG now ranks amongst the world leaders
Exports are crucial to XCMG’s growth and its aim to becoming a dominant player in the worldwide construction machinery market – Mike Woof writes

One of China’s biggest construction equipment manufacturers, XCMG has a high profile, and particularly in the country’s home market. XCMG is a leader in key equipment categories such as concrete pumping and lifting technologies.

The firm’s 4,000tonne crawler crane introduced two years ago has already proven its worth in a massive industrial construction application and is now awaiting further tests of its lifting ability.

The firm aims to build on this however and now has extensive operations in the global market, as well as a wide array of products for earthmoving and road construction. During 2012, XCMG’s total revenue exceeded 100 billion RMB, meanwhile export revenue for 2012 hit US$1.6 billion.

Exports are increasingly important for XCMG, with strong sales into Latin America, Africa, the Middle East and other parts of Asia. And in the emerging markets XCMG is seen as a first choice for many customers, according to the firm. Zhang Yanmei is vice president and said, “We offer complete construction solutions in the emerging markets.” She added, “For the moment Latin America, Africa and the Middle East are XCMG’s main export markets.” Although headquartered in Xuzhou where its manufacturing output is also concentrated, XCMG also has a number of production facilities in other major Chinese cities. Outside of China, XCMG also has manufacturing operations in Brazil, Poland, Malaysia, Iran, Argentina and Uzbekistan.

A key move made in 2012 was XCMG’s acquisition of 60% of the Schwing concrete pump business, crucial to the company’s plans to become a major force worldwide. Following this deal, XCMG and Schwing established a joint-venture in 2013 for the Chinese market, while the Schwing brand remains the focus for sales into developed markets.
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bauma China 2014 Preview XCMG larger excavator
Much larger excavators have been developed by XCMG to broaden its range
International coverage is strong and XCMG has a major presence in over 40 countries, while the company has also ensured it gives good support with 30 components centres, 10 training facilities and eight call centres located around the world. In all XCMG has seen exports to 169 countries around the world, including the US and a number of countries in Europe.

Venezuela has provided a particularly big opportunity for XCMG, following a massive machine order to the country’s oil sector. The logistics operation to support the Venezuela order with spares has been substantial. Sam Shang, director and general manager for the firm’s South American operations said, “XCMG also has an office in Colombia, in Bogota. It’s an important market for us.”

XCMG has a population of some 30,000 machines in Latin America and also has facilities in Chile and Argentina. The factory in Argentina focuses on assembling kits but the company is looking to ramp up its plant in Brazil, where the market for truck cranes is particularly strong. Import duties mean that manufacturing in Brazil is necessary for any manufacturer to have a strong presence in the country. Around 80% of the machines XCMG sells in Brazil are also made in the country at the firm’s Sao Paulo plant and Shang said, “It’s close to the airport.”

In Latin America servicing and technical support is a key focus, along with operator training. Support is also given to Latin America on which machines best suit use for specific projects. Meanwhile the company has also customised some products to suit the different way Latin American customers use these pieces of equipment. The graders in particular have been adapted following customer feedback for example.

Looking ahead, XCMG will increase its presence both in North America and Europe, with a long term plan to boost its operations in developed markets. In the US, XCMG already has a substantial presence in Minneapolis, as well as service centres in New York and Orlando. In addition, the company is establishing a service centre in Houston, while XCMG set up a European research and development centre in 2013 and as it already has a substantial presence in Minneapolis, its US research and development facility will be situated close at hand.

The US and European research and development facilities work closely with the company’s Chinese headquarters as XCMG is keen to continue developing its technology so that its products will meet the demands of customers in North America and Europe.

For North America XCMG is working hard to raise the profile of its products and also prove to customers that the machines offer high performance and reliability. In addition, the company is considering seriously whether to start manufacturing in the US at some point in the future, most likely in Minneapolis where it already has a strong presence. If this plan moves forward, XCMG’s crawler cranes and truck cranes could be built at the facility.

XCMG has already committed to entering the North American market, showing cranes as well as 8tonne and 12tonne soil compactor models and 21tonne, 26tonne and 36 tonne excavators that meet US requirements at Conexpo in Las Vegas early in 2014. Support is strong and Shang said, “In the US, customers can order parts online.”

Meanwhile plans are also in hand for new products and the company is now working on the design for a 3.5tonne zero tail-swing mini excavator and a 13tonne reduced tail-swing excavator. These should be available in the first half of 2015.

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