Vanda 31 Xugong overseas expansion - Bowen Preview

Vanda 31 Xugong overseas expansion June 22, 2010

China Construction Machinery accumulated over several decades, not only in domestic market share continued to expand, even in the technology and services with world-renowned brands continue to draw closer, more valuable, the Mainland has several large companies based on the domestic market, actively planning a grand blueprint for overseas.

2008 since the second half of the financial crisis sweeping the globe, most of the domestic enterprises in the overseas market sales decline, but this did not stop the pace of internationalization of the firm. From high-profile acquisition of CIFA Zoomlion to the highly controversial event in Cologne, Germany Sany advance, to speed up the acquisition of Xuzhou Construction Machinery Group, another way of overseas R & D institutions, all major events highlight the China Construction Machinery vow and international brands of sub-world ambitions.

XCMG, China United, Trinity is in the public mind of construction machinery industry's big three, the three companies \After several years of development, business development from the industry to enhance exports, to seize the international market, to recruit overseas agents, overseas mergers and acquisitions, investment in factories, etc., can be said that the pace of internationalization further and further exciting.

analysis by comparing the three companies of international practice, you can find one thing in common: the focus on overseas mergers and acquisitions together, Xugong emphasis on acquisition of overseas R & D institutions, 31 overseas factories to concentrate on. Their tactics vary, but the way the export of capital are beginning to refresh the product output of the \

is like \
1, the first overseas expansion path, the three companies focused on different:

1) Zoomlion overseas mergers and acquisitions with a strong emphasis on industry competitiveness in foreign companies, through mergers and acquisitions to achieve \\Compared with traditional overseas factories, with the industry through the acquisition of foreign companies with strong capabilities to quickly achieve technical, marketing, human resources integration;

2) Xuzhou Construction Machinery Group to acquire foreign R & D institutions as core strategies, despite the acquisition of Xuzhou Construction Machinery Group overseas R & D is not yet realized, but the strategic plan is very useful guide, learn from other enterprise;

3) more likely to own Sany invest and build factories overseas plant is also a way of expansion, but if not to improve the technology as the core, pure plant expansion will increase operating costs.

2, M & A management, the three companies are different in nature:

1) Zoomlion is good at the capital through the operation of overseas markets and achieve the integration of quality assets overseas. The acquisition of Italian CIFA's case, Zoomlion Joint Hony Capital, Goldman Sachs, Mandarin Fund, cash acquisitions, to complete the full acquisition of CIFA shares. Through the introduction of international and domestic well-known, has extensive investment experience of investors, and Zoomlion complement the management team, not only for the success of the transaction provided a unique ideas, resources and geographical relations, but also help the next play to their strengths, to ensure the integration after the acquisition to be successful implementation;

2) Xuzhou Construction Machinery Group's overseas expansion strategy unified by a group operation, decision-making by the Board after the relevant departments directly subordinate to the operation; < br>
3) and Sany Heavy Industry is a company incorporated in Hong Kong, wholly owned subsidiary of Trinity International Development Co., Ltd., by the whole operation and management of the company's overseas factories. Disadvantages of this model is adding a layer of management structure, as registered in Hong Kong has undoubtedly increased the cost of management. In the management structure of listed companies should tend to flat, vertical oriented, so more conducive to healthy and effective corporate governance. Therefore, the 31 model the effectiveness of the market needs a piece of \

Zoomlion overseas expansion mode

1. overseas market situation

1, overseas sales side. 2007 United Overseas income of more than 1 billion yuan, but there is no overseas distribution. In 2008, only 20% of joint sales from overseas markets, 2010, in conjunction there will be 60% of the sales revenue from overseas markets.

2, sales of geographical areas. Zoomlion already, including Asia, the Americas, Africa, Europe, Oceania and other area and set up a sales and service outlets, committed to service and other parts of the supply of local, set local real sales and service marketing strategies.

3, according to the joint overseas expansion plans, by 2010, Zoomlion built 35 overseas branches, offices, 160 foreign repair stations.

2. expansionary path

1, the domestic market expansion

\Zoomlion growth through its own internal development and external acquisitions combined with strong support for its unconventional development strategy.

since 2001, Zoomlion gradually acquired the United Kingdom Paul Jie, Hunan Machine Tool Works, successful industry, Pu Yuan Group, Shaanxi Xinhuang Engineering, Hunan Axle plant???? especially the 2003 the acquisition of the Pu Yuan Group, the income of 1.173 billion yuan from 2003 to 2004 jumped 33.8 billion yuan, up 188.11 percent.

these serial acquisitions, makes Zoomlion concrete machinery business from the initial project has expanded to the lifting machinery, concrete machinery, sanitation machinery, construction crane, road machinery, earth-moving machinery and other fields, as Currently the most complete product chain engineering machinery enterprises. Zoomlion sales market in 2000 from 2.5 billion yuan in the year 2008, 24.6 billion yuan, profits of more than 3 billion yuan.

2, overseas market expansion

\and after-sales service system. At present, direct investment Zoomlion direction of the main customer service, including marketing, network construction and maintenance services.

taking into account the operation of Chinese enterprises lack of international experience, \Gives the brand perception abroad is \Thus, the major equipment on its own ability to break into the international market is very difficult, and overseas markets high-end products and brand recognition is very high.

the above considerations, I believe that their investment relative to Sany plant, Zoomlion acquisition of overseas companies tend, through digestion and absorption of foreign R & D technology, enterprise management methods, marketing management practices, the establishment of Zoomlion brand awareness, reputation, and create a \open boundaries.

3. Case Analysis

1, \Goldman Sachs, and Mandarin Fund, to invest 271 million euros acquisition of the Italian Competition Law Corporation (CIFA) 100% of the shares. Zoomlion which 162.6 million euros investment, access to CIFA 60% stake. Zoomlion become the largest, second in the world of concrete machinery manufacturer, can be said that this acquisition in conjunction with international journey landmark strategic significance.

merger integration, the two companies in the sales channels, R & D, brands, manufacturing processes, raw materials, parts procurement, capacity utilization on the synergistic effect was obvious.

1) in the sales network, the Alliance and the CIFA will form the domestic market and overseas markets complementary pattern;

2) in the brand, the two brands will meet the different levels of customer demand;

3) in the procurement costs and increase bargaining power in procurement negotiations to expand the size of the procurement will further reduce costs;

4) product technology, CIFA can improve the Union skills and enhance the core competitiveness in the Union;

5) product manufacturing,zero skateboards, large production capacity in the Alliance for CIFA simultaneous increase in size and profits.

2, finance lease

a) Development of Construction Machinery

marketing model in China construction machinery industry is in transition to a new strategy and development opportunities, construction machinery industry The marketing model has a corresponding stage in a transformation. The industry's marketing model are numerous, there are direct sales, agency sales, rental sales, sales mix, as well as in China, start-up financial leasing and network marketing and so on.

development from the developed models of construction machinery market, \Cat's official website shows that Caterpillar Financial Services Limited (CFSC) in global assets under management more than 27 billion U.S. dollars, 60% for the Caterpillar's global financial services clients.

\According to the information that the U.S. construction equipment giant Caterpillar Inc. for more than 60% of the world, more than 80% in the developed areas in order to finance lease sales are conducted in a way. At present, China's construction machinery industry, finance lease rate is only about 8%. Domestic and international financial leasing of construction machinery industry has demonstrated the huge gulf finance lease development prospects.

b) foreign financial leasing Zoomlion create a precedent for overseas finance leases in the United

terms for overseas expansion path in addition to Italy to spend generous CIFA merger, the financial leasing its another way. China's construction machinery industry, Zoomlion This created a precedent for overseas financing lease. The so-called \

in the background of the global financial crisis, the Chinese can make use of their mobility advantage of using the Chinese capital to help the Chinese products to the world, occupying the international market. Zoomlion use in the Chinese banking system, good credit, strong financial institutions in China with the liquidity advantage, raise funds, and actively promote the global finance lease service system, provided by the target market, financial leasing and other financial services to achieve on equipment sales and Acting.

in the context of the financial crisis, financial leasing of construction machinery is even more to show its advantages.

finance lease sales in the traditional stage, the mortgage business and operating leases based on the sales of a new credit model, not only a great lack of funds or to meet liquidity needs of customers, and expand Sales of construction machinery market, so that \

the same time, in recent years, the domestic construction machinery enterprises have a lot of its production capacity expanded. But the sudden financial crisis in market demand suddenly reduced, resulting in the fate of these new capacity was idle. In this case, the construction machinery business by way of finance leases reduces the downstream firm's use of the cost of excess capacity for enterprises to find a quick exit. Construction machinery enterprises choose to use the sale of finance lease sales model can be extended so as to achieve the purpose of expanding market share. For those larger, more abundant cash flow of construction machinery enterprises, financing of leasing companies set up their own meaning is self-evident. Such as the Alliance,south indian cooking, XCMG, three first-class engineering machinery companies have their own leasing companies.

Xugong overseas expansion mode

2. overseas market situation

1, overseas sales side. Xu workers broke through to 2008 the export 800 million U.S. dollars, in 2009 exports will try to reach one billion U.S. dollars.

2, sales of geographical areas. XCMG vigorously implement export-led international development strategy, products have been sold to more than 130 countries and regions worldwide, over 60 overseas agents.

3, at present, only two XCMG overseas assembly plant, assembly plant in Poland in December 6, 2008 completed the second half of production in 2009. Recently set up assembly plant in Brazil may be, will be officially put into operation in 2010.

Xugong the next few years will increase by 20 overseas distributors and five overseas spare parts centers. To achieve this goal, Xuzhou Construction Machinery Group is stepping up implementation of \

3. expansionary path

present, the main route Xugong overseas expansion include increasing the overseas distributors, construction, spare parts centers overseas to speed up factories abroad, acquisition of overseas R & D institutions.

contrast, Xugong more attention to foreign R & D acquisition. Although XCMG acquisition of a foreign R & D is not yet achieved, but great reference for the strategic plan.

4. Case Analysis

2008 年 12 6, Xugong first overseas assembly plant in Lodz province lowicz city completed the second half of 2009, production is expected to . XCMG Polish assembly plant construction area of about 5,000 square meters, mainly used for assembly Xugong loaders, hydraulic pressure machine, tile machine and other products.

2009, Poland will implement a 5 billion euros of infrastructure expansion, Xu assembly plant in Poland, the completion of work the right time. XCMG to expand the plant on the European market share and improve the competitiveness of products is important.

Sany

an overseas expansion mode. overseas market situation

31 Group has 15 subsidiaries overseas, more than 1,300 sales and service personnel overseas year round To provide products and services to customers worldwide. To date, 31 total exports of more than one billion U.S. dollars. 31 In the United States, India, Germany, 3 R & D center and production base construction is intense. Currently 31 have been completed and 15 in the global logistics center, parts warehouse as the core of the logistics system and service support system is forming.

2.

Sany expansion path through the development of overseas agents, financial leasing, overseas mergers and acquisitions, initially established a global manufacturing and sales system. In contrast, Sany more emphasis on foreign direct investment in manufacturing R & D base.

Sany registered in Hong Kong formed a wholly-owned subsidiary of Trinity International Development Co., Ltd., by the whole operation and management of the company's overseas factories. Relevant information, the Ministry of Commerce on July 27, 2007 formally approved the agreement Sany Heavy Industry in Hong Kong, \

Sany's overseas expansion model is unique, the shortcomings of this model is to add another layer of management structure, as registered in Hong Kong has undoubtedly increased the cost of management. In the management structure of listed companies should tend to flat, vertical oriented, so more conducive to healthy and effective corporate governance.

3. Case Analysis

1, Case 1: Sany Heavy Industry India plant

2007 year, Sany Heavy Industry India investment 60 million U.S. dollars in construction machinery production base , a Chinese-funded enterprises far the biggest in the Indian direct investment;

Sany Heavy Industry to invest in India, the industry alike. It is understood that the next few years will invest 30 billion U.S. dollars in India build 12 highways, and 3.2 billion plan to transform the railway, two billion U.S. dollars to build the port. India to statistics, in recent years, India's construction equipment sales in between 15-20 billion dollars, the future of construction machinery market in India is expected to maintain an average annual growth of more than 20%. Based on this background, Sany Heavy Industry is expected to increase investment in India will soon be rewarded. Indian market is in rapid development, Sany Heavy Industry has to grab opportunities.

2, Case 2: Sany U.S. investment

2007 年 9 months, Sany Heavy Industry and the U.S. government signed a memorandum of Georgia, plans to invest 60 million U.S. dollars new construction machinery factory. The project is the largest of Hunan Investment in the United States, 31 has become China's first plant in the United States to establish machinery manufacturing enterprises.

3, Case 3: Sany Germany plant

2009 年 1 29, Sany Heavy Industry and the German North Rhine-Westphalia government signed an investment agreement to fund the 100 million euros in Cologne Construction of 31 European machinery manufacturing base. After completion, the annual sales income of 350 million euros, gross profit of 48.02 million euros.

SANY that the product chassis, pumps, engines and other major parts procurement mainly from Europe, the company set up manufacturing base in Europe and in local sales, you can save high costs for transportation. However, the Sany Heavy Industry in the United States and Germany invest and build factories, a potential problem is: relative to saving transportation costs under, Sany Heavy Industry plant in Germany, the investment cost is very high, it may be difficult to achieve the desired earnings target.