Construction Machinery Plant Opens Backward Integration

Through international procurement, Chinese manufacturers have solved the problem of supporting the core components. Under the impetus of strong market demand, the whole plant has developed rapidly and its capital strength has greatly increased. However, the scale will not grow without limit. The low profit rate brought by the increasingly fierce competition in the market will cause the whole plant to have to pay attention to the cost of front-end procurement. According to experts from related industries, in the entire industrial chain of construction machinery, core supporting equipment such as hydraulic parts and engines accounted for 70% of profits, and the whole machine company only obtained a 30% profit.

For any business, it is impossible to ignore the 70% of the front-end profits. According to the 2011 semi-annual report, a large number of first-line machine brands have invested heavily in upstream components.

According to the survey of China Construction Machinery Business Network, as of the end of June, Sany Heavy Industry has four component subsidiaries, which are Zhongxing Hydraulics, which produces hydraulic parts, and Zhongcheng Machinery, which produces concrete transmission pipelines. It produces middle parts of cast parts and structural parts. Source of new materials, as well as the production of electronic control system of the 31 intelligent control. The 2011 Sany semi-annual report mentioned that “in the first half of 2011, Sany Heavy Industry made major breakthroughs in the research and development of key components such as cylinders, speed reducers, hydraulic systems, and cabs. The self-production rate of parts continued to increase, resulting in product gross margins. Improve."

Zoomlion's 2011 semi-annual report shows that the key industrial hydraulic project upgrade project for construction machinery in Hong Kong has achieved 98% of the expected investment. The two major hydraulics companies, Zhonglian Hydraulics and Tellus Hydraulics, respectively received capital increase. 60 million yuan and 240 million yuan.

According to the survey of China Construction Machinery Business Network, as of the end of June this year, the total investment of the project was 1.10762 billion yuan (including 101.83 million yuan in non-current assets investment and 88.41 million yuan in floating capital investment), "Liugong Engineering Machinery Hydraulic Components R&D and Manufacturing Base Project. "A total of RMB 16.36 million has been invested to complete 14.94% of the project investment plan. This project was implemented by Liuzhou Liugong Hydraulic Components Co., Ltd., a wholly-owned subsidiary of Liugong.

According to a survey conducted by the China Construction Machinery Business Network, in 2010, three of the nine projects for which Xugong Machinery issued private placement and investment funds were invested in parts and components. The total investment scale reached 1.4 billion yuan. By the end of June 2011, a total of 140 million yuan had been invested in the core technology upgrading and industrial investment projects for key hydraulic components of construction machinery, completing 27.01% of the expected investment, and accumulatively investing 140 million yuan in the “new key components and technical transformation projects”. 24.76% of the expected investment was completed; the “Technical Transformation Project for Thin-Fill Sheets such as the New Cab of Construction Machinery” accumulated a total investment of 97 million yuan, completing 31.91% of the expected investment. After the successful implementation of all projects, the supporting capacity of Xugong Machinery will be upgraded to a new level, and the overall profitability will also be significantly improved.

In the field of construction machinery, China has a large number of parts manufacturers, but also formed a number of brands with competitive advantages. However, the overall supporting capacity is still weak, especially the high-end parts and components, and the lack of leading companies in the leading role, the development is slow. China Construction Machinery Business Network reporter believes that high-end parts and components need a lot of investment in research and development, China's vast majority of parts and components manufacturers unbearable, which is the main reason for the slow development. Another reason is that China lacks a good talent environment, especially in hydraulic systems, where there are obvious shortcomings in talent.

China Construction Machinery Business Network reporter believes that compared to the traditional parts and components manufacturers, the machine manufacturers have obvious advantages in terms of capital strength and talent reserves, and they can often achieve breakthroughs through their strong resource advantages. Therefore, at present, whether it is the development needs of the complete machine manufacturers or the development needs of the entire industry, all manufacturers are required to make improvements in the parts and components to enhance the competitiveness of national brands.

According to the China Construction Machinery Business Network survey, world-class engineering machinery companies such as Caterpillar and Komatsu also have strong manufacturing capabilities in terms of core components. Both engines are top products in this industry. If China's first-line brands want to truly establish themselves in the world, the manufacturing of the core components must be completed as soon as possible.

At present, the new investment in the whole plant is mainly invested in hydraulic components, and investment in other areas is still relatively small, but the situation is still blooming. Sany Heavy Industry has made great strides in the field of electronic control systems. The joint venture between Xugong and Doosan The engine project has entered the mass production phase. The curtain of China's whole machine factory marching into the upstream of the industrial chain is starting.