China's Economy and Informatization: Sany Heavy Industry Leaps into the Dragon Gate

Transferred from: NetEase Source: "China Economy and Informatization" magazine

Liang Wengen's wish came true ahead of schedule. Eight years ago, when Sany Heavy Industry Co., Ltd. (hereinafter referred to as Sany Heavy Industry) had just landed on the A-share market, Liang Wengen put forward his own idea - planning to use 10 years to build Sany Heavy Industry, which was still like a "self-employed enterprise" at that time, into a multinational group with brand influence and a *5653, and among the top three construction machinery companies in the world.

And all this was achieved in less than 8 years. In 2003, when Sany Heavy Industry first appeared on the A-share market, the company's net assets were only 600 million yuan. Eight years later, Sany Heavy Industry's total assets reached 49.752 billion yuan (as of June 30, 2011), and its market value exceeded 100 billion yuan - at least 130 times that of the initial listing. Sany Heavy Industry's products have made a high-profile appearance in the name of Chinese brands in a series of large-scale rescue activities in the world, and there is no doubt that Sany has become a large company with international influence. In June this year, the factory built by Sany Heavy Industry in Germany was officially put into operation, and Sany Heavy Industry completed the "qualitative transformation" of multinational enterprises.

Overseas strategy: to open a factory in Germany

On June 21, 2011, the factory opened by Sany Heavy Industry in Germany was put into operation, which is a big step for Liang Wengen to become a large equipment manufacturing enterprise in the world. The Hunan businessman, who is close to the sixtieth year, said that Sany Heavy Industry invested in the construction of factories in Germany, which is full of strong competitors, aiming to combine the cost advantages of Sany Heavy Industry with Germany's technological advantages, and have a place in the heart of global engineering technology by competing with strong competitors.

This goes back to 2007, when one day in March and April of that year, the Investment Promotion Agency of the German state of North Rhine-Westphalen received an email from Sany Heavy Industries, expressing its willingness to find a vacant land in Germany to invest in a factory.

This e-mail became the starting point for the marriage between NRW and Sany Heavy Industry. However, North Rhine-Westphalia, and even Germany, is not the choice of Sany Heavy Industry. Sany Heavy Industry has previously inspected other European countries, but finally chose Germany, which represents the country of today's construction machinery *5661 end technology.

Frank Weidtmann, who gives *5656 the impression of being grim and unsmiling. As the manager of the China project at the North Rhine-Westphalia Investment Agency, he speaks in a low voice, but with a German sense of humor, and the implementation of the Sany project has become part of his personal ambition: "We value the Sany project, it has to be here, in addition to its large investment scale, and I don't allow my competitors to get it." ”

As the project manager, Weidmann has always been in close contact with Sany and has tried to meet any investment-related requirements of Sany as much as possible, including helping to advise on the location of the factory and accompanying him everywhere to see the land.

In order to win the big customer of Sany Heavy Industry, Weidmann will fly to Shanghai with the mayor of Bedburg, North Rhine-Westphalia, even for a conversation; Hua Pei, the general manager of the North Rhine-Westphalia Investment Promotion Agency, flew to Changsha twice with a local politician to visit the headquarters of Sany Heavy Industry, with the aim of hoping that they would invest in North Rhine-Westphalia

* In the end, Weidmann's somewhat "selfish" efforts paid off. Excellent service made Sany Heavy Industry* finally choose North Rhine-Westphalia. In May 2008, Sany Heavy Industry Co., Ltd. registered and established a German branch in Cologne, the economic and cultural center of North Rhine-Westphalia, and plans to invest 100 million euros to build a factory and set up a research and development center in Bedburg, an old and quiet town, about 40 kilometers away from Cologne, with an area of 24.8 hectares.

Of course, the talent advantage is also one of the important reasons why Sany Heavy Industry chose to set up a factory in Germany, He Dongdong, chairman of Sany Germany Co., Ltd., said: "In the whole of Europe, the capital of construction machinery should be said to be in Germany, where it is easier to find talents. Secondly, Germany itself is also one of the markets for *5655. ”

Entering the German market and successfully setting up factories and R&D centers, to a certain extent, Sany Heavy Industry represents not only a corporate behavior, but also a signal that China's equipment manufacturing industry is moving towards the world's strongest country. Machinery manufacturing is one of Germany's most innovative industries, with 28% of the world's machinery manufacturing patents currently applied for by German companies, with 6,100 companies in the value chain and more than 930,000 well-trained technical employees.

Therefore, this move of Sany Heavy Industry has been valued by Chinese state leaders. On January 29, 2009, Sany Heavy Industry and North Rhine-Westphalia held a signing ceremony in Berlin, the capital of Germany, attended by Wen Jiabao, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, and Angela Merkel, a female chancellor with a doctorate in physics from eastern Germany.

Two years later, on June 21, 2011, Sany Heavy Industry Bedburg Industrial Park, Germany, which had been in preparation for three years, was officially put into production. At the opening ceremony, in addition to the Minister of Economy of North Rhine-Westphalia Foxberg, the Chinese Ambassador to Germany Wu Hongbo, and the Deputy Secretary of the Hunan Provincial Party Committee and Governor Xu Shousheng appeared.

The provincial governor, who was transferred to Hunan after the signing of the foundation stone of Sany Heavy Industry German Industrial Park, spoke highly of Sany Heavy Industry's performance: In recent years, Sany Heavy Industry has vigorously implemented the internationalization strategy, strived to promote construction machinery products to the world, and actively built manufacturing plants and R&D centers abroad. The completion and operation of the Sany German Industrial Park project will effectively enhance the competitiveness of Sany Heavy Industry in the European market, create new jobs for the city of Bedburg, and contribute to the local economic and social development.

Job creation is also one of Weidmann's concerns, and he says his personal ambition not to let competitors get hold of him is not unprincipled. In the face of Europe's overall debt crisis and economic downturn, Weidmann said: "The important thing is that Sany has created a lot of jobs, because it is a manufacturing company, and once it is established, it will create a lot of jobs. Weidmann's explanation shows the fundamental reason why NRW spends so much energy to attract Sany Heavy Industry.

In fact, the establishment of Sany Heavy Industry in Germany has also injected fresh blood into the local economic development. Since the signing of the contract in January 2009, Sany has completed the first phase of fixed asset investment of more than 40 million euros as planned, employing more than 100 German employees.

After the project of Sany Heavy Industry in Germany is put into production, it will produce 3,000 construction machinery products annually and is expected to achieve annual sales revenue of 350 million euros. For many conjectures from the outside world, He Dongdong said that in a head-to-head confrontation with strong opponents, Sany Heavy Industry has accumulated a certain amount of confidence. In 2009, Sany became the world's largest concrete pump manufacturer with a sales volume of *5655.

Surpassing you on your turf has become a great mission for Sany to enter Germany, and it is also an important step in Sany Industry's overseas strategy.

Capital strategy: from separation to market entry

In November 1994, Liang Wengen summoned his brothers, who were stationed in Lianyuan and Changsha at the time, to a meeting at the Xiaoxiangcheng Hotel in Changsha to clarify the property rights of two companies with different territories at that time. This is Liang Wengen and Tang Xiuguo, Mao Zhongwu, Yuan Jinhua and Xiang Wenbo (blog) four brothers have been in business for many years*5656 times "divided the family property".

According to Xiang Wenbo, Tang Xiuguo, and Wang Zuochun, from the time Liang Wengen announced the plan to the time it was adopted, it was useless to even 10 minutes. Liang Wengen's plan is that the equity of Lianyuan Material Factory, Liang Wengen, Tang Xiuguo 21% each, Mao Zhongwu and Yuan Jinhua 20% each, Zhai Dengke 11%, Wang Zuochun 5%, Xiang Wenbo and Zhou Fugui 1% each.

At that time, Sany was still in a state of negative equity, so Liang Wengen let himself bear 56% of the "debt rights", Tang Xiuguo, Yuan Jinhua, and Mao Zhongwu each accounted for 8%, Xiang Wenbo 7%, Zhou Fugui 12%, and Wang Zuochun 1%.

Regarding such a decentralization law, Tang Xiuguo and Wang Zuochun said: "No one raised objections, and everyone thinks that it is not an exaggeration for Mr. Liang to account for 50% even in Lianyuan Material Factory." He doesn't care about the interests of Lianyuan Factory, and no one cares about Changsha. ”

Liang Wengen's decision to divide his "family property" in this way is, to a certain extent, to let several brothers die with him and live together. From the perspective of Sany's subsequent development, Liang Wengen's "separation of family profits" this time is the *5656 step taken by Sany from a family business to a modern institutional enterprise. So far, Sany has changed from one person managing an enterprise to a team managing an enterprise, which is also a shareholding system reform based on the successful landing of Sany Heavy Industry on the basis of A-shares, which is 9 years before Sany Heavy Industry was listed.

Nine years later, on June 18, 2003, based on Liang Wengen's split of the "family property", a private enterprise became a private equity enterprise, and Sany Heavy Industry's long-brewing listing plan finally landed. However, this is more than Zoomlion (000157. SZ) was listed nearly three years later, which is more than XCMG Machinery (000425. SZ) went public almost 7 years late. Sany Heavy Industry issued 60 million shares for the first time, with an issue price of 15.56 yuan per share, and actually raised nearly 900 million yuan.

Technical Strategy: Win with a stunt

Before the listing, the situation of Sany Heavy Industry was not very good, with total assets of only 1.153 billion yuan, but total liabilities of 679 million yuan, of which current liabilities were 657 million yuan. The main business income in the first three years was not very high, 393 million yuan in 2000, 550 million yuan in 2001, and only 985 million yuan in 2002, but the growth rate was rapid. In addition to more than 200 million yuan in 2002, the net profit was less than 100 million yuan in the first two years.

As the leading product of Sany Heavy Industry, the competition in China was extremely fierce at that time, including nearly 40 enterprises producing trailer pumps and more than 10 enterprises producing pump trucks.

Although the sales revenue of Sany Heavy Industry concrete pump truck has maintained rapid growth, the growth rate in the first three years of listing has exceeded 100%, with a year-on-year increase of 143.26% and 165.82% respectively, but the initial prospectus has not avoided this problem - with the saturation of the market and the expansion of the company's scale, there is a risk that the growth momentum of Sany Heavy Industry's main business income will decline.

From the perspective of subdivisions, Sany Heavy Industry's trailer pump products needed to face competition from Zoomlion and Hubei Construction Machinery Co., Ltd. (hereinafter referred to as Hubei Construction Machinery).

The roller needs to face more competitors, not only domestic brands XCMG and Luoyang Construction Machinery, but also foreign brands Ingersoll Rand (Wuxi) Road Machinery Co., Ltd. At this time, Liang Wengen was a little melancholy. The reality he faces is somewhat complex and difficult to be optimistic: "With the intensification of competition in the industry, coupled with the non-standard competition in the market, it may lead to vicious competition, resulting in a decline in the selling price of products." This sentence was also written in the prospectus of the listing.

In fact, the leading domestic construction machinery low-price consumption concept and consumption capacity, low-price product market has existed for a long time, and occupies part of the market, and will still exist for a period of time.

Of course, Liang Wengen's "reform" is not over yet, and the only way to make this "reform" successful is to rely on technological innovation. After the listing, Liang Wengen increased Sany Heavy Industry's investment in technology research and development. As his good partner, he is not tall, and Xiang Wenbo, who has a Chinese face, said earnestly that he was forced to take the road of Chinese creation. Pumping equipment is the key equipment of building construction, which has a great impact on the progress and quality of the project, so it has high requirements for the reliability of pumping products.

Therefore, Liang Wengen decided to increase Sany's investment in scientific research and development, starting from 2002, Sany Heavy Industry's technology development expenses that year were 43.68 million yuan, accounting for 4.44% of the sales revenue of that year. In the following years, the investment in research will be further increased, aiming to reach 10 per cent of sales revenue by 2005.

Through the establishment of more than three research institutes in Shanghai, Beijing, Xi'an and other places, to ensure the leading position of Sany Heavy Industry products. Its determination was written in the initial public offering: "On the one hand, through the company's own research and development, the technical level of the leading products is at the forefront of the world's peers; On the other hand, the company has expanded to new product areas with high technical barriers and weak market competition. ”

At the same time, Sany Heavy Industry has also formed strategic alliances with scientific research institutes such as Central South University, Northeastern University, Chang'an University, and Beijing Institute of Automation, making full use of the advantages of scientific research institutes such as talents and scientific research methods, so that the company's research and development capabilities have been supplemented and extended. Engineer's offices have been set up in Germany and the United States to track the new technological developments in the global construction machinery industry and improve their capabilities in technological innovation.

Marketing Strategy: The Global Market Behind the Rescue

If the listing is Liang Wengen's *5656 big step for Sany Heavy Industry to get out of the shadow of "small workshop", then entering overseas is the second big step. In this second big step, the most eye-catching event is Sany Heavy Industry's participation in the rescue of the San Jose copper mine disaster in Chile. This was called by foreign media as a "Made in China" global *5,656 positive public relations.

At this time, Sany Heavy Industry had set up its own branches in India, Japan and the United States. Together with the South American market and the European market, Sany plans to achieve overseas sales accounting for more than 30% of total sales by 2015. Xiang Wenbo said: "The real driving force of overseas markets comes from market demand. He said that in many developing countries in South America, Southeast Asia and Africa, infrastructure construction is still very backward.

Xiang Wenbo's statement is also reflected in Sany Heavy Industry's 2010 annual report, and they believe that the scale of infrastructure investment in India, Brazil and other regions in the next five years will be comparable to that of China, and these infrastructure construction will bring impetus to the development of the industry.

In opening the South American market, Hao Heng, an ordinary member of the Sany Heavy Industry Overseas Corps, played a vital role.

On September 21, 2010, Hao Heng, an employee of Sany South America Co., Ltd. (hereinafter referred to as Sany Brazil), who has the title of "MrNoProblem" in Chile, was about to rush to the field to do a "diagnosis" for a motor grader, when he received a call from BURGER, a Chilean *5655 hoisting company, asking him to rush over to test a 400-ton crawler crane, "because this 'behemoth' is about to go to the San Jose copper mine disaster site to show his skills." ”

When Hao Heng and his colleagues arrived, they were told that in the San Jose copper mine disaster rescue plan formulated by the Chilean government, BURGER won from three bidding companies as the main unit of the rescue, and the equipment purchased by BURGER happened to be the crawler crane of Sany Heavy Industry, and they arranged two operators to participate in the rescue, working day and night, undertaking the heavy task of lifting the steel casing and lifting the rescue cabin, and arrived at the scene in early October after completing the equipment testing and rescue drills.

Although this is a disaster relief for the Chilean state, the challenges faced by Sany Heavy Industry are everywhere. *Three lifting companies participated in the initial bidding for rescue equipment, namely crawler cranes from Manitowoc, Terex and Sany Heavy Industry. In the end, the winning BURGER company proposed the on-site rescue plan with the SCC4000 crawler crane produced by Sany Heavy Industry as the main equipment.

However, the problem also presented itself to the engineer. The crawler crane has passed the warranty period, "Will there be an accident?" The behemoth needs to be disassembled and transferred, what should I do if the installation goes wrong? At this time, Hao Heng immediately asked to go with the team to ensure the safe operation of the crawler crane.

Hao Heng's decision made the head of BURGER breathe a sigh of relief.

On September 29, in order to ensure the smooth completion of the rescue mission, the rehearsal of the mine disaster rescue began, Hao Heng recalled that the SCC4000 crawler crane was in good working condition and had stable performance. This is due to the unique hydraulic design of the SCC4000 crawler crane, which allows the machine to be carried smoothly. This made him very confident in the equipment of Sany Heavy Industry.

However, this was not the case when Sany Heavy Industry's products first entered the South American market. Sany Heavy Industry, which entered the crawler crane industry in 2004, only began to enter the South American market in 2006 and 2007. The same is the product of Sany Heavy Industry, concrete machinery,Piling machineryIn continuous growth, crawler cranes have not "opened their beards".

In 2008, after a difficult decision, BURGER purchased a crawler crane from Sany Heavy Industry, but no one cared for it within half a year. Later, BURGER came up with the idea to drive Sany Heavy Industry's crawler crane to a highway and lift a large flatbed truck for five days.

BURGER also rented a helicopter to film the scene and make it into a CD for the customer. * Later, with the intervention of the Chilean media who paid attention to this "performance art", Sany Heavy Industry's crawler cranes began to be rented.

In this rescue, Sany Heavy Industry's equipment defeated big names such as Manitowoc and Terex, Hao Heng said, which made the vast majority of foreigners begin to look at "Made in China" with new eyes, no longer arrogant and prejudiced, but replaced by surprise and trust.

However, there are still people who pour cold water: the appearance of Made in China in Chile is just a coincidence, "this is like the occurrence of a mining accident, which is itself an accident".
Although Hao Heng was a little excited about participating in the rescue, he did not stop facing the pathos of "MadeinChina" in the international market: although it is an industrial power, it is not an industrial power. In fact, China is far from being a technological power, a creative power and a brand power, and more of a "world processing factory" that relies on OEM and cheap labor to build a non-deep competitive resource, "This image has brought difficulties to Chinese enterprises to expand overseas." ”

According to Hao Heng, this international image of China allows Sany Brazil's marketing representatives to communicate with customers, and the most important place to spend energy is not the price, but the repeated elaboration of quality. This is not only a problem that Sany needs to think about, but also a common problem that Chinese enterprises have to think about from the perspective of globalization.