Engineering machinery company banks on innovation for success in BRI economies

Guangxi Liugong Group Co Ltd, a leader in China's engineering machinery industry based in Liuzhou, the Guangxi Zhuang autonomous region, has strengthened innovation-driven growth to actively participate in shared development in the markets related to the Belt and Road Initiative, and has achieved rapid growth in overseas markets.

The company currently operates businesses in 140 countries and regions, among which 50 have been involved in the BRI, with production bases in Brazil, India and Poland.

Zeng Guang'an, chairman of the Stated-owned company and a deputy to the 13th National People's Congress, said the company will face up to the challenges and continue its efforts in innovation to help in the construction and prosperity of the economies related to the initiative.

"The shift from 'made in China' to 'created in China' sets a clear direction for companies like us to innovate our science and technology, and to become a world-class modern enterprise," Zeng said.

"We will strengthen research and development in key areas to better meet market needs, and continue to improve core competitiveness in overseas markets, especially in the BRI related markets."

Going global is the company's core strategy, despite various risks and challenges during the process, such as complicated political and economic environments, trade barriers, tariffs, fierce competition, and lack of talents, according to Zeng.

The company is planning to strengthen its two core business sectors - engineering machinery and construction machinery, further tap into emerging sectors such as agricultural machinery and robots, and build a platform integrating modern financial services, aiming at high-quality development, Zeng said.

About one-third of the company's income is from overseas markets, which the company aims to further increase.

Riding on the back of the recovery in the global construction machinery market last year, the company's major international product lines achieved sales growth higher than the industry average, with its total overseas revenue rising by 30 percent.

Through in-depth overseas marketing, localized manufacturing, mergers and acquisitions, and strategic alliances, among many other measures, the company established 120 distributors, 348 outlets, six product parts centers and six training centers in BRI markets.

"There is a strong demand for infrastructure, bringing great opportunities for engineering machinery enterprises," said Zeng, adding that the company can provide comprehensive solutions for various transportation and infrastructure needs with its world-leading product portfolios and localized manufacturing.

Globally, the company has nine overseas marketing subsidiaries, nine regional product parts centers, and more than 200 overseas distributors, covering some 140 countries and regions.

"In the future, we will deepen our efforts in those markets, establish marketing and interaction throughout the value chain to create a comprehensive marketing network," he said

The company plans to adopt more innovative customer-oriented and competition-oriented business models, and will focus on core products for 20 major country markets, which accounted for nearly 70 percent of its overseas sales in 2018, and two thirds of its global market revenues.

It will also make new products based on characteristics of those markets, enrich its product portfolio and enhance product competitiveness, and will improve the local operation networks in key overseas markets through measures such as establishing retail companies, and upgrading the India-based regional business center.

Citing successful experiences in India and Poland, Zeng said the company will continue to foster localized manufacturing in overseas markets.

The Indian branch has been making full use of its localized manufacturing capability, perfecting the marketing and after-sales service networks, and creating new products to cater to local requirements.

Zhou Lisha, a researcher at the research institute of the State-owned Assets Supervision and Administration Commission under the State Council, said Chinese companies are focused on product and service quality, and are willing to strengthen communication with local stakeholders, creating a solid framework for sustained cooperation with local manufacturers.