The first financial daily: Sany Heavy Industry Coping with uncertainty: make-up classes, fitness, change, hunting, breakthrough

Source: *5656 Financial Daily Author: Liu Qiong

At the beginning of this year, after the acquisition of the German "Elephant" global concrete machinery giant Putzmeister, Sany Heavy Industry recently acquired German concrete for 8.1 million euros through its subsidiaryMixer trucksEnterprise Intermix GmbH.

"The global economic downturn will bring good acquisition opportunities, and also give Sany Heavy Industry the opportunity to 'hunt' internationally." Xiang Wenbo, President of Sany Heavy Industry, said at the 2012 Fudan International Forum on Management that the company is gradually focusing on internationalization as a way to break through the industry dilemma under domestic regulatory policies.

Uncertainty intensifies

Continued investment in assets and infrastructure construction has enabled China to enjoy 20 years of rapid growth. Sany Heavy Industry, founded in 1994, is also one of the beneficiaries, achieving sales of 50.7 billion yuan last year, a year-on-year increase of 50%, and profits of 9.7 billion yuan.

However, since the second half of last year, the regulatory policy has led to a sharp decline in the construction machinery industry, and even the profits of listed companies have fallen by 80% compared with the same period last year. Despite this, in the 5656th quarter of this year, Sany Heavy Industry achieved a profit of 5%, Xiang Wenbo said, "but there is still uncertainty about how the world situation will develop next and what impact it will have on China's economy." ”

One of the uncertainties encountered by Xiang Wenbo is that Sany Heavy Industry was originally scheduled to go to Hong Kong on July 16 this year to promote its IPO, but it was canceled for some reason. He admitted that the rumors of cash flow and "layoffs" hurt the company a lot, and affected the issuance of the IPO to a certain extent. He said that the company is not preparing to land on H shares because of lack of money, but hopes to obtain an international platform to support more international acquisitions.

But internationalization is challenging. According to data from the Ministry of Commerce of China, non-financial foreign direct investment in the first half of the year was 35.4 billion US dollars, a year-on-year increase of 48.2%, of which cross-border mergers and acquisitions accounted for one-third of the total foreign investment in the same period. According to the study, the failure rate of Chinese companies' overseas investment is about 67%, while the international average failure rate is about 50%.

An important reason is that Chinese companies have a "nesting" mentality of "the body goes out, but the brain still stays in the country". However, Xiang Wenbo believes that after the merger and acquisition, it should be more about inclusion rather than integration. "It's like I found a German wife, if I have to try to transform her into a Chinese, it is impossible." In the same way, he said, it would be impossible for the German lady to turn me into a German. After Sany acquired the German Putzmeister company, it did not send a single Chinese over, but this year, the company's profits have risen a lot, "so to engage in mergers and acquisitions, where the body is, where the brain should be." ”

Five coping strategies

The five strategies of make-up classes, fitness, change, hunting, and breakthrough are the "trump cards" of Sany Heavy Industry to deal with uncertainty. With the rapid growth of Sany Heavy Industry in recent years, another Sany Heavy Industry will be built almost every year, and the demand for talents will also double. However, with the rapid growth in the past few years, there is no time for effective training of personnel, Xiang Wenbo said. This year, the pace of development has slowed down, and companies have begun to conduct large-scale training to "make up for it" for employees, including operation, assembly, and dismantling of machines.

In addition to "making up classes", Xiang Wenbo said that the second way for Sany Heavy Industry to deal with uncertainty is "fitness".

Although Sany Heavy Industry has developed rapidly in recent years, is Sany strong objectively? Xiang Wenbo also put a question mark in his heart, so he wanted to "fitness". "We want to adjust the rhythm, that is, to strengthen internal management, strengthen independent innovation, improve product quality, enhance the competitiveness of our enterprises, and strengthen the body."

The third way is change. As a manufacturing enterprise, Sany is well aware that manufacturing capacity is the foundation of the enterprise, and to become a "century-old store", it is necessary to implement lean production.

In addition, as mentioned earlier, the global economic downturn has also brought good acquisition opportunities, giving Sany the opportunity for the fourth strategy to come into play - that is, "hunting". Xiang Wenbo revealed that *Sany Heavy Industry also has several overseas acquisition projects in the near future.

Sany Heavy Industry's fifth trump card is "breakthrough". With the decline of the Chinese market, the entire construction machinery industry is facing a bad environment, Sany Heavy Industry began to focus on internationalization, "breakthrough" is to use internationalization to reduce dependence on the Chinese market.