Business

Changsha Zoomlion to intensify its expansion

By Zhou Yan (China Daily)
Updated: 2010-08-20 13:49

A crane developed by Zoomlion Heavy Industry is moved off the assembly line in an industrial park located in Hunan province. Guo Liliang / For China Daily

CHANGSHA - Changsha Zoomlion Heavy Industry Science and Technology Development Co, one of China's biggest construction machinery makers, is planning to strengthen its overseas expansion by setting up three to four industry chain bases abroad.

"These bases will be located in South Asia, North America and Europe, in line with our company's global roadmap," He Wenjin, general manager of Zoomlion International, told China Daily. He declined to reveal the total amount of the investment.

"Our cooperation partners have been selected (and some of the bases will be officially put into operation next year," He said.

In the first half, South America and Southeast Asia were Zoomlion's major export destinations, accounting for 30 to 40 percent of the company's total export volume, He said, noting that South Asia and Africa will emerge as the company's primary overseas markets going ahead.

He estimated that in the coming year, the European market may remain stagnant, while Africa, in particular northern and southern Africa, and South America's Brazil will see robust growth," he said.

Zoomlion, which jointly acquired Italy's Compagnia Italiana Forme Acciaio SpA (CIFA) with Goldman Sachs and other two financial investors in 2008, has geared up overseas expansion after seeing a slowdown in exports during the financial crisis.

The proportion of its overseas sales to the company's total dropped to 12.6 percent in 2009 because of shrinking international orders on the back of economic woes. That compared with 20 percent before the crisis.

"We expect Zoomlion to generate 50 percent of its sales outside China by 2015," said He.

Zoomlion announced in a statement in July that it plans to float shares in Hong Kong to beef up its internationalization, without giving a specific timetable.

Parts of the initial public offering proceeds will be injected into the Zoomlion's international division to boost its expansion, He said.

Sany Heavy Industry Co, Zoomlion's major rival and also based in Changsha, Hunan province, has pumped over 2 billion yuan ($294.51 million) into building up manufacturing and research and development bases in the United States, India and Brazil so far since 2007.

"China's construction machinery builders, including Zoomlion and Sany, have been very active in mature markets by setting up plants and acquiring foreign companies in recent years to strengthen their footholds," said Chu Yanhui, an analyst at AJ Securities Co.

Zoomlion expects its first-half net income to generate between 1.63 billion and 2.17 billion yuan, up 50 percent to 100 percent from the previous year.

Its A-share rose 2.83 percent to close at 24.71 yuan in Shenzhen on Thursday.

China Daily