Zoomlion: China's Engineering Machinery Industry Will Continue to Grow, But in a Lower Speed

News provided by

Nov 18, 2011, 07:55 ET

CHANGSHA, China, Nov. 18, 2011 /PRNewswire-Asia/ -- In recent years, more and more Chinese enterprises have gone abroad and gone up to a new stage of merging with businesses overseas. In order to better guide Chinese enterprises to make high value overseas investments, the first China Overseas Investment Summit (COIS), co-organized by the Hong Kong China Chamber of Commerce (HKCCC) and the CCTV, was held in Hong Kong a few days ago. At this summit, "Award for Classical Successful Overseas Investments Made by Chinese Enterprises" was issued for the first time. Zoomlion, Lenovo, COSCO, TCL and Hualing won this award jointly.

As a leading enterprise in China's engineering machinery industry, which maintained an annual compound growth rate of 60% for 19 consecutive years, Zoomlion became the only enterprise that won this award in China's equipment manufacturing industry because of its successful merger of CIFA and continuously deepened international expansion.

According to Weici Cai, the vice chairman of China Machinery Industry Federation, it is expected that the increase of machinery industry will achieve double-digit growth in 2011. With the growth rate of production and sales, it is estimated to achieve around 25% of growth, while the profit growth rate is expected to be around 16%.

China's machinery industry brought its climax of sales growth in Q1 of 2011. The growth rate of China's engineering machinery enterprises has slowed down obviously since April of this year, comparing to the same period of 2010, and even shows a downward trend month by month. The growth rate from January to October decreases by 8% comparing to the 33.93% in 2010.

Shen Ke, the board secretary of Zoomlion, believes that: "China will accelerate its steps for the economic structure adjustment and the transformation of economic growth mode during the "twelfth five year" period. So the growth rate of GDP and investments in fixed assets will both decrease. As a result, China's machinery industry will also end its fast growing momentum in the past decade. The overall industrial scale will continue to grow in the future, but the growth speed will slow down."

XCMG's related official said that engineering machinery industry is such an industry that tides with economic cycle and national investment policies closely. Therefore, the industry's development is facing huge challenges. However, China's engineering machinery still has sound growth prosperities in the "twelfth five year" based on the gaps in urbanization rate between China and developed countries, and the giant demands in the construction of water conservancy projects, low-income housing and other infrastructures.

As the two large engineering machinery manufacturing enterprises in China, Zoomlion and XCMG both set their revenue goals of more than 100 billion yuan for the twelfth year to lead the industry development continuously.

"This year, Zoomlion will also try to achieve the revenue goal of 50 billion yuan", said Chunxin Zhan, Chairman of Zoomlion, "and our growth rate in the next year will remain in double-digit".

In reference to the overseas development, Ke Shen said that: "Zoomlion will seek for opportunities to establish factories and investment cooperation in foreign countries such as Brazil and India. Meanwhile, we will set up R&D centers in developed countries like USA to improve Zoomlion's international competitiveness. And try to achieve the goal that overseas income accounts for around 35% of the group's total revenue by 2015".

SOURCE Zoomlion