LiuGong’s Global Footprint in 2015
More than ten years ago, LiuGong made its first venture into international business. Today, more than 35% of its total revenue comes from overseas markets. It has transformed into a truly global company.
Capturing New Opportunities – LiuGong Advances along the “Belt and Road”
China’s “Belt and Road” initiative, as the name suggests, is a trade network covering the Asian, African and European countries located along the established routes of the “Silk Road Economic Belt” and “21st Century Maritime Silk Road”. In effect, it seeks to promote win-win cooperation among participating nations by breaking infrastructure bottlenecks. This will be achieved through boosting the efficiency of resource allocation and promoting greater market integration. This initiative presents opportunities that ambitious CE manufacturers – including LiuGong, the premier Chinese construction equipment manufacturer – are prepared to take advantage of. Over the past ten years, LiuGong has established its business network in 62 of the 65 B&R countries, as well as a dealer network that includes service and parts distribution centres, in five Central Asian countries.
On December 2, nine LiuGong’s machines, including the best of its wheel loaders, excavators and road equipment, were displayed at the commencement ceremony for the China-Laos Railway Project in Vientiane, Laos. 17 days later, Chen Hao, General Manager of LiuGong Asia Pacific Pte. Ltd. and General Manager of LiuGong Thailand Private Limited dealership, was invited to the kick-off ceremony of the Sino-Thai Railway Project. Collectively, these two events heralded LiuGong’s support of the Chinese government-backed “Belt and Road” Initiative.
Pushing the Global Business Forward – LiuGong’s Global Dealer Conference 2015
LiuGong’s Global Dealer Conference began in 2003 with only eight dealers but in 2015 attracted over 500 attendees from 76 countries.
Having begun its internationalisation strategy in 2003, LiuGong has become an example to other enterprises in the Chinese CE industry. In 2015, while the entire industry was in recession, LiuGong still had some highlights in its overall performance. Not only were its substantial indicators – such as assets income, operational cash flow and asset quality – better than the industry average, but also, its proportion of overseas income increased to 35%. In 2015, LiuGong maintained its position as the leading industry exporter of loaders, skid steer loaders and backhoe loaders in terms of volume. At the same time, its overseas sales of loaders, forklifts and bulldozers have been rapidly increasing.
Optimisation for Advancement
As a symbol of globalisation for China’s engineering machinery industry, LiuGong’s most significant activity for expansion in 2015 was the reconfiguration of its overseas market organisation and resources. LiuGong started to strengthen its after-market business by creating a new department – the LiuGong Global Post-Market Business Division. Jack Liao, Assistant to President who is responsible for managing this Division, directly reports to Yu Chuanfen, President of LiuGong. This department will work closely with LiuGong’s regional offices in Suth Africa, Brazil, United Arab Emirates, Netherland, India, Poland, Singapore, Russia, Hong Kong and the U.S. to manage the product life cycle for LiuGong’s global customers and build global training systems. Meanwhile, LiuGong advanced the transformation and enhanced the localization of its global subsidiaries in Asia Pacific, Middle East, Africa, India, Russia, North America, Latin America and Europe.
In the past year, LiuGong has also set up a R&D centre in North America and is continuing to build up its global R&D capabilities in India, Poland and the UK.
These new measures have helped LiuGong make gradual but real progress towards internationalisation. “This new system lays a framework and foundation for the international expansion of LiuGong for at least 50 years to come.” said Zeng Guang’an, chairman of the LiuGong Group.
Unveiling the New Chapter of Industry’s Technology – Global R&D Centre Opening
Throughout 2015, LiuGong launched more than 20 new products into the global market. Closely linked to this robust expansion of its product line is LiuGong’s continued investment in R&D. LiuGong’s 110,000m² global R&D centre opened in Liuzhou in June 2015.
This new facility will become the hub that influences LiuGong’s four other world-class R&D facilities in India, Poland, United States and the United Kingdom. Its completion marks a major milestone in the expansion of the company’s R&D capability – the new centre boasts world-class hardware, a state of the art testing platform, a modern manufacturing plant, and more than 1,000 members of LiuGong’s top technicians, 15% of which are based outside China.
The Future – Aiming High, Achieving More
LiuGong hopes that by 2020, half of its sales volume will come from overseas markets. “Overall, our real competitors are the American enterprises,” Zeng frankly states, “American enterprises have the most comprehensive global layout and are strong in both their soft and hard power. These challenging competitors and the potential opportunities for Chinese enterprises will only serve to heighten LiuGong’s aspirations.”