Zoomlion Chairman Zhan Chunxin Addresses Harvard Students on Overseas Acquisitions

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Mar 07, 2011, 01:15 ET

BOSTON, Mass., March 7, 2011 /PRNewswire-Asia/ -- Dr. Zhan Chunxin, Chairman and CEO of Zoomlion, a key manufacturer of high-end machinery products from China, delivered a speech entitled "New Stance of Chinese Enterprises for Internationalization" at Harvard's Business School, where he shared his wisdom on overseas mergers and acquisitions with an audience of Harvard students and financial professionals.

"The new stance of Chinese enterprises for their bids to internationalization can be characterized by inclusion, sharing, and responsibility," said Dr.Zhan, adding, "We should always lie low while enabling others." His words are saturated with typical values of the Chinese tradition: one shall give before he receives, and realize himself by making others successful.

Zoomlion acquired CIFA, the world's third largest concrete machinery maker back in 2008. Dr Zhan elaborated his points through a case study on this acquisition.

Italian President Giorgio Napolitano conferred the Leonardo International Award to Dr. Zhan on January 25, 2011 in recognition of his contributions to the Italian economy. Dr. Zhan attributed this honor to Zoomlion's stance to actively include itself into the local corporate community. "The Italians realized we were not there to launch a new Chinatown, but to work with them to build a wider 'Roman Avenue,'" Zhan noted in humor.

"The spirit of inclusion makes one immune to homesickness. The word 'inclusion' itself includes respect, understanding, and active adaptation. The sharp differences between Chinese and western cultures turn out to be a major obstacle in the internalization efforts of Chinese enterprises. To remove these obstacles, what we need the most are inclusion and sought-for common grounds. We should become one with the local culture by adapting ourselves rather than the other way around." As Dr. Zhan recalled, he was told on the day after the CIFA acquisition that the company was not going to arrange anyone to accompany him throughout his stay in Italy. This would be deemed an act of disrespect back in China, but it is indeed a norm in Italy. Thanks to his homework to fully understand the Italian culture, Dr. Zhan was not the least bit uncomfortable, knowing that it was merely a cultural difference.

"A responsible enterprise fosters responsible employees, who in turn formulate an admirable enterprise," said Dr. Zhan .After the acquisition of CIFA, Zoomlion made no replacements among the management team, but successfully developed a new league of common interests through a clear-cut vision of development and a system of equity incentive for CIFA. No Italian employee was laid off even in the most difficult days of the financial crisis. Likewise, CIFA did not suffer any loss in its core management team, whose members even voluntarily lowered their salary requirements, took initiatives to raise capital for the company, and fought with the company for the better.

Dr. Zhan, a researcher-turned entrepreneur, holds a number of patents on his inventions and is entitled to a special allowance from the State Council of China available only to individuals of spectacular contributions. Dr. Zhan is equally outstanding in business management. He founded Changsha Zoomlion in 1992 with another seven partners with a loan of 500,000 RMB yuan ($70,000 US dollars). The company listed its a-shares on the Shenzhen Stock Exchange in 2000, and H-shares on the Hong Kong Stock Exchange in 2010. Through serial acquisitions, Zoomlion has been growing at an average rate of 60 percent over the past 18 years, and is now a global top-10 manufacturer of construction machinery.

In May 2010, Dr. Zhan was given the "Yuan Baohua Business Management Award," the highest honor for Chinese business management, established in 2005 by the China Foundation for Business Management Sciences. Dr. Zhan was the first entrepreneur from the country's construction machinery sector to be so honored.

SOURCE Zoomlion