Xiang Wenbo: This year, Sany wind power investment has doubled, and overseas investment has been re-digested

(China Economic Net-Netease Finance Joint Report on March 5 Author: Zhang Qi'an)Xiang Wenbo, a deputy to the National People's Congress and president of Sany Heavy Industry, accepted a joint interview with China Economic Net and NetEase Finance in Beijing today. In 2009, some of Sany Heavy Industry's investment behaviors caused controversy in the market. For example, Sany Heavy Industry plans to invest tens of billions of yuan to build wind power industrial parks in Jilin, Jiangsu, and Hebei. In addition, Sany Heavy Industry's overseas expansion is mostly to build new bases rather than acquire local enterprises, how to open up the market in the face of an unfamiliar environment?
As for the domestic new energy field, Xiang Wenbo believes that there is no problem of excess. He said there is a vague concept of overcapacity, "such as most production."Wind power equipmentof enterprises, his capacity can also produce other machinery and equipment. From the macro background, he said that in the 30 years of reform and opening up, it is not yet possible to say which industry has real overcapacity. Xiang Wenbo believes that as far as the wind power industry is concerned, China's wind power currently accounts for less than 1% of power generation, but some developed countries account for 20%, and China has great potential. In addition, the wind power capacity of some countries is not as good as that of China, and if you look at it in the global context, wind power capacity is not excessive.
In addition to the demand factor, Xiang Wenbo said that Sany Heavy Industry has a large number of independent technologies in the field of wind power equipment manufacturing, "as soon as we enter this industry, it is a high starting point, which is where Sany's confidence lies in daring to invest in wind power." ”
He said that this year, Sany Heavy Industry's investment in wind power equipment manufacturing will double.
Last year, Sany Heavy Industry's overseas investment was in full swing, but a closer look shows that Sany Heavy Industry did not join the tide of overseas acquisitions by Chinese companies, but built new bases on its own.
Representative Xiang Wenbo used "digestion" as a metaphor for overseas investment. He believes that the new overseas base can first ensure that the enterprise can develop according to its own ideas, "The new overseas company can invest as much as it wants, but the acquired company must be restricted by the local environment." However, overseas acquisitions of mature enterprises can take over a mature system, including channels, relationships, etc., but Xiang Wenbo believes that these can be "digested" is the key. Overseas acquisition companies are subject to local culture, business awareness and other aspects of constraints, "Many Chinese enterprises have imperfect business awareness, why these acquisition companies?" He believes that foreign direct investment in new companies is not necessarily a risk-reducing strategy.
Regarding Tengzhong's acquisition of Hummer, Xiang Wenbo showed more incomprehension, and Xiang Wenbo, who had commented a lot on Carlyle's acquisition of XCMG, was also confused at this time. "I don't know what's going on, I don't want to talk about it."

The following is a transcript of the interview:

Moderator: Hello Mr. Xiang. Last year, we mainly paid more attention to Sany Heavy Industry in two aspects, *5656 problems are the expansion of our Sany overseas business, the second problem is our Sany business promotion in the field of new energy, let's talk about *5656 topics that everyone is more concerned about, that is, the expansion of our overseas business, in fact, we last year including the beginning of this year, you said that you spent more than 200 million US dollars in Brazil to build a new base, including a new R&D base in Germany last year, You think that last year, Chinese enterprises in the overseas including central enterprises and private enterprises, more acquisitions, but it seems that there are very few new constructions, can you talk about our Sany overseas expansion strategy, why not to acquire?

Xiang Wenbo: This actually reflects two different ideas of internationalization, on the one hand, of course, through mergers and acquisitions, reorganization to implement internationalization, I think that in this way to achieve internationalization, European and American enterprises use more, I have also talked about a point of view in many interviews, behind the internationalization of enterprises is actually an extension of the will of the country, it is accompanied by the country's military, political, diplomatic, is backed by the state, the past international market should be said to have been dominated by European and American countries for a long time, Therefore, they adopted this method relatively strongly, and it matched the global political, economic and even military pattern at that time, when it could be said that Europe and the United States ruled the whole world.
As a Chinese enterprise, we are now in a different era of development, relying on strong mergers, restructuring of mergers and acquisitions, may not be suitable for Chinese enterprises, so we are also exploring their own path of internationalization, we believe that taking this direct investment method, can greatly reduce the risk of enterprises, *5655 The problem is that the scale and progress of our investment are completely controlled by ourselves, for example, we invest 100 million euros in Germany, which is equivalent to 1 billion yuan; We invested 200 million US dollars in Brazil, which is equivalent to more than 100 million yuan, and last year the profit of our entire group reached more than 4000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 So the risk is controlled.
On the other hand, we have very little conflict with the local area. Because our investment is a new increment for the local government, bringing them new jobs and new sources of financial income, the local government is also very welcoming to us, because we are not trying to absorb his stock, so it can also reduce the conflict between the two sides. In this way, we can also greatly reduce the other party's defense and resistance, because as I just said, our direct investment is to create tax revenue and create jobs for the local people, rather than to merge and reorganize their existing industries, and from their psychological point of view, the degree of impact is relatively low.
Another point is that there are fewer conflicts in terms of culture, in fact, we go to build a new enterprise by ourselves, and the employees we recruit, first of all, he will come to apply for the job if he agrees with our Chinese company, and he will come to the company if he agrees with the Chinese culture, so that in the future in the process of business operation, the difficulty of this cultural integration will be greatly reduced.
In addition, our direct investment can be completely in accordance with their own ideas to plan its development, for example, its production organization, including our production, research and development and global layout, can be carried out in full accordance with their own ideas, if you are merging an enterprise, then this is not the case, for example, in order to maintain the original employment scale, not to cause a large number of personnel layoffs, in fact, your adjustment is subject to various constraints, this is also a very headache, you suddenly pick up a "plate", All workers' wages, benefits, etc. must be fully borne at once, for us, we build a new one, and the risk in this regard is relatively low, so this may be another way of thinking about the internationalization of Chinese enterprises, and we are also actively exploring.
From a practical point of view, there are still very few successful cases of Chinese enterprises engaged in overseas mergers and acquisitions, this problem is actually very worthy of our Chinese enterprises to think about, of course, I am not saying that our Chinese enterprises must not do well, I believe that one day Chinese enterprises will have the ability to integrate and merge these foreign enterprises, but what must be the situation at that time? *5656, our entrepreneur's own business ability has been recognized by the world, people do not think you are a "nouveau riche" but a real entrepreneur with management ability, is an operator, people serve you, this is *5656;the second point is that your enterprise really has its own core competitiveness, for example, there are some enterprises in China that have achieved success, but this success factor may not be replicated abroad, for example, the success of our Chinese enterprises, It's more based on China's opportunities, not that our Chinese enterprises have many core competitiveness, the core competitiveness is strong enough to support us to merge and reorganize these foreign enterprises, I don't think that's the case.

Moderator: Risk control is a very important factor for you to consider.

Xiang Wenbo: That's right.

Moderator: But there are also many people who ask, if you build a new base overseas, compared to the acquisition, when you acquire, you not only acquire the company, nor only the relationship of the company in the host country, but also its channels, if you build a new base, you may need to build your own channels, and you have to deal with the local government, including local enterprises, will this be a problem?

Xiang Wenbo: No, a good thing is a good thing, don't say this, for example, we say that the advantages of mergers and acquisitions are very clear, that is, you just mentioned, including technology, network, system, talent, etc., these are all good things, the question is whether I have the ability to digest good things? Only when you have this digestive ability can you eat, it is a good thing for others, but it is not necessarily good for you, for example, I am a patient, I can't stand eating too nutritious things, I can't digest it, then this will cause some damage to my body, this is the same reason, that is, good things depend on whether you can digest it.

Moderator: Digestion is actually very important.

Xiang Wenbo: Yes, digestion is very important, good things are good things for you, a nutritious product, but for me it may be a poison, as a business is also like this, a beautiful thing is not necessarily good for you, it must be something you can digest, and what suits you is really good.

Moderator: Is the new overseas base a model that can be replicated or become successful for Chinese enterprises in the future?

Xiang Wenbo: We are also exploring, and this cannot be said to have been successful. But we are confident in our success.

Moderator: Last year's new energy industry as a whole has a kind of argument, that is, that the new energy industry as a whole is excessive, and we also see that as a heavy industry enterprise, Sany is also entering the new energy industry, such as the manufacture of wind power equipment, and last year's investment is still very large, what do you think of the "new energy surplus" argument?

Xiang Wenbo: I strongly disagree with this argument, because in the process of China's reform and opening up, there has always been an argument that restricts the development of China's economy, which is the so-called concept of "overcapacity", but looking back on the course of our reform and opening up in the past 30 years, I really can't say which industry is really overcapacity, because everyone's understanding of the potential of China's economic development and the needs of China's economic development is extremely not profound. None of us could have imagined that China's auto industry would be able to surpass the combined production of automobiles in the United States and Japan last year, and I believe that many people would not have imagined it, so there is not enough understanding of China's own potential, which is a concept. Another concept, in fact, there are some problems in the definition of wind capacity, because of the production of wind power, you see that the wind turbines that produce wind power in our country are all originally engaged in equipment manufacturing enterprises, if the production capacity of these enterprises is converted into wind power production capacity, then of course this is a huge number, but in fact this is not the case, because these equipment and production capacity engaged in wind manufacturing can also produce other equipment manufacturing, this identification is actually very vague in concept.

Another point, I think the prospects of wind power generation are very broad, you see now our wind power generation accounts for less than 1% of our total electricity consumption, and in some developed countries has reached 20%, what a big gap, plus the global market, now wind power generation is more backward than China There are many countries, and I think this clean energy is always a direction of development, so to calculate the potential of China's future market and the potential of global demand for clean energy, Then this market is very large, and there is no problem of overcapacity.

Moderator: Everyone has a more or less point of view, that is, the new energy industry is a policy industry, because it may need certain policy support, and now China has not introduced some substantive support policies, such as new energy power generation grid, electricity prices, etc., is the domestic market now open?
　
Xiang Wenbo: Now the state has introduced some policies, such as subsidies for wind power generation prices, in fact, there are some policies; On the other hand, with the development of a low-carbon economy and the international community's further attention to carbon emissions, I think that wind power, as a reality, is also a relatively low-cost and high-quality energy source, and its actual use value in the future is very high.

Moderator: I saw that Sany invested a lot in the field of wind power equipment last year, including you built a lot of industrial parks, you would like to ask Sany, the key technical aspects of wind power energy, have you mastered it? Because of Goldwind in China, Dongfang Electric and they are also producing this thing, will you be slightly better than them in terms of technology?

Xiang Wenbo: You asked this question very well, in fact, China's wind power generation is still a lack of core technology industry, many of which are production license systems, but Sany has taken a completely different path, we are now completely independent research and development of wind power technology, so now our wind power is wind power with core technology, such as our automatic control system, converter, frequency conversion system, our several major parts: generators, reducers, blades, these are our own production, So this is the difference between our Sany entry into the wind power industry and other enterprises *5655, as soon as we enter it is a high starting point to enter, from the core, from the key entry point, so now we use Sany's wind turbines in the wind tide are all generators with independent core technology.

Moderator: Will you invest more in wind power equipment manufacturing this year than last year?

Xiang Wenbo: Of course, last year we actually just started, large-scale investment has just begun, for example, the investment in the production of reducers, generators and other equipment we talked about has just started, so this year's investment must be much larger than last year, not 50%, but doubled.

Moderator: Double?

Xiang Wenbo: Or more than doubled.

Moderator: Are the products we produce mainly for domestic or export?

Xiang Wenbo: At present, it is mainly domestic, and in the future, it will mainly be the international market.

Moderator: For China, will you cooperate with the power grids of some large power generation companies?

Xiang Wenbo: That's right.

Moderator: Last year, there was also a very hot news in our domestic heavy industry industry, that is, Tengzhong's acquisition of Hummer, in fact, I also know that when Carlyle acquired XCMG a few years ago, you also expressed some of your own opinions at that time, what do you think of Tengzhong's acquisition of Hummer?

Xiang Wenbo: I didn't study this case, because it has nothing to do with the industry I am engaged in, and I don't know much about this industry, as you said, this acquisition has not been completed, so I don't think it makes much sense to discuss its value now, although I don't know too much, but it feels like it's always foggy, on the one hand, Tengzhong always says that it is an acquisition, and the Ministry of Commerce says that it has never received their application, and I don't know what is going on, so I don't want to talk about this case more.

Moderator: Because this case may still be a very chaotic situation for you?

Xiang Wenbo: Yes, I don't know much about this industry, and I don't know much about this merger, because the information outside is very confusing, on the one hand, Tengzhong said that we are actively talking, and the relevant departments of the state said that they have never heard of it, and I don't know what is going on, because logically speaking, such a big acquisition should be reported to the relevant departments of the state, and there should be a prior communication and report, but it seems that they are talking about their own, the government is talking about the government, and the company is talking about the enterprise.

Moderator: Do you think this would be a hype?

Xiang Wenbo: I can't come to this conclusion, because many things can be easily understood as hype, but I hope that everyone will not look at it like this, but see it as a kind of corporate rational business behavior, because we Chinese are hyped too often, and everyone can naturally say that anything is a hype.

Moderator: What was the overall business situation of Sany Group last year?

Xiang Wenbo: Last year's situation was very good, we completed more than 300000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000 We also made an announcement that the performance in 2009 increased by more than 50% compared to 2008, and I think that as a shareholder, this performance should be relatively satisfactory.

Moderator: Do you have any expectations for Sany's performance this year?

Xiang Wenbo: I am very optimistic, one is that last year, the country stimulated economic growth a series of measures in the market demand release from the end of last year just began, this year there will be a continuation, in addition, this year although the country has taken a series of measures to curb economic overheating, inflation, but these measures are to limit excessive growth, not to limit growth, so obvious GDP growth of 8% This can be expected, GDP growth of 8%, for our industry, for many enterprises in China, That's a huge opportunity for growth.

Moderator: Will the proportion of Sany's overseas revenue increase this year?

Xiang Wenbo: Actually, the proportion of overseas income in Sany has not been very high, only about 10 percent, less than 20 percent, this year we hope to be able to return to the level of 2008, in 2008 overseas income accounted for less than 10% of our total income.