The Bauma China Expo Will Be A Litmus Test For Zoomlion's Ability To Build A World-class Enterprise

With the approach of Bauma China 2014, Zoomlion's aim is to become a"world-class equipment manufacturing enterprise" by acing said litmus test.

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Bauma China is a world-class event in the field of mechanical engineering. Thanks to its positioning with respect to globalization, the show is regarded as theindustry's best indicator of overall market strength. Zoomlion's ability to produceworld-class responses during the 2014 Bauma expo is undoubtedly the focus ofthe show's attention.

"Responses" according to different strategies

Asa presenter of world-class enterprises, Professor William Newman of ColombiaUniversity in the United States believes in fierce market competition. Only highly exceptional business strategies (in terms of high performance, high quality and high service) are likely to spawn world-class enterprises.

After decades of continuing development, the construction machinery industry has grown to include a complete range of top-notch products, consistent with theindustry's most rigorous standards of quality. And with the field of constructionmachinery verging on excess production capacity over the last two years, the need to develop a highly differentiated market strategy has penetrated to the core of Zoomlion's developmental ethos. This point will be fully reflected in the 2014 Bauma China expo.

It is widely acknowledged that for the upcoming Bauma China expo, besides furnishing Display 27 with the show's flagship product, Zoomlion will includeits complete line of products and a number of concept creations at the forefront of the world's most advanced technology.

The soon-to-appear LNG mixer is a snapshot of Zoomlion's highly differentiatedstrategy. New energy-efficient products are a selling point. Using Zoomlion'shighly developed cabs in conjunction with heavy, professional-grade truckchassis cuts energy costs by 20 to 40%, thereby meeting the requirements ofglobal environmental emissions standards. Key to cylinder function in LNGvehicles is Zoomlion's requirement that chassis manufacturers use the brand'stop international core technology cryogenic cylinders with a master cylindercapacity 20% larger than that of its competitors. The successful implementation of this lossless, time-saving technology is second to none in the industry interms of product endurance. Plus, it is backed up by the most rigorous safetyrequirements on the planet.

The environment has recently become a prominent issue of socio-economic developmentin China, with more and more citizens discussing the increasing presence ofsmog. From this perspective, the appearance of LNG mixers is not only a part ofZoomlion's actively adjusted product structure, but the implementation of ahighly differentiated strategy is an inherent requirement of China's social andeconomic development. This also shows that Zoomlion is on its way to becomingthe world-class enterprise it aims to be.

The "bright side" of global deployment

William Newman also pointed out that in order to become a globally competitive,world-class enterprise, resources must be allocated so as to be accessibleworldwide.

This also coincides with the new outlook of Zoomlion's chairman of the board ZhanChun. He believes that the internationalization of business is not merely aquestion of selling products and building factories overseas, but also entailsintegration into the global industrial ecology and the allocation of resourcesworldwide.

What  are the consequences of Zoomlion's allocation of global resources in thecontext of this year's exhibition? The upcoming exhibition of the T8030-25 tower machine provides clues.

In 2011, Zoomlion successfully bought out the German originator of the toplesstower crane, namely the JOST total technical package, regarded as the"global benchmark in tower crane designs". On this basis and eversince, it has constantly brought innovations in the area of tower cranetechnology.

TheT8030-25 tower crane applies JOST flathead tower crane technology through thelaunch of innovative new products, remarkable for their high performance and reliability, as well as their outstanding energy efficiency, safety,convenience and personalization.

The successful localization of Zoomlion products comes from extensive marketresearch and the wise application of advanced JOST technology and concepts toenhance domestic models and develop new ones.

In the R&D process for the T8030-25 tower crane, the design team, thinkingalong international lines, uses as its reference the world's leading productsof a similar nature. Existing products that are already well established on themarket are analyzed. After repeated and rigorous simulations, a number of majorimprovements are synthesized to greatly enhance the overall performance andsurpass the lifting capabilities of similar models produced by other domesticmanufacturers. The series is currently being sold to Germany, Singapore, HongKong and other high-end markets, of which it has succeeded in gaining the approval.

Thanks to the integration of this resource, Zoomlion tower cranes achieve seamlessalignment between technology and international standards, having made the jumpfrom leading China to leading the world, accounting for roughly 20 percent ofcurrent global market share.

"Gains" achieved under the strategic layout

In fact, the T8030-25 tower crane is not the only product that will debut at theBauma China expo, so will the RX2740SF high-frequency construction elevator,the ZE150R excavator and other products resulting from Zoomlion's successfulworldwide resource allocation.

Our understanding is that the ZE150R excavator derived from the recent acquisitionof Chery Heavy Industries. The transition from resource integration to completeacquisition over the span of just two months leaves no doubt about Zoomlion'sskills at global resources allocation.

Moreimportantly, the conversion of Chery Heavy Industries resource integration alsomarks the official launch of Zoomlion's agricultural machinery sector. Zoomlion'smachines to be exhibited shortly are a case in point.

The agricultural machinery sector constitutes one of the five major building blocksthat link Zoomlion's strategic layout together.

In 2013, to compensate for the risks that come with the industry's economic cyclesso as to realize sustainable development, Zoomlion expanded the company's focusto include not only the construction machinery industry, but also agriculturalmachinery, the environmental industry, heavy trucking and financial services for a total of five major sectors.

Zoomlion's construction machinery, environmental industry, agricultural machinery, and financial services are firmly established as four of the major building of itsmarket strategy, while the trucking sector is gradually settling into place as the strategic fifth major building block. Zhan Chunxin believes that this five block business model will provide the driving force for sustainable developmentas Zoomlion follows its strategic path to becoming a future leader amongworld-class companies.

The publication of the Party's 18 reports should accelerate the pace toward enhancing the international operations of Chinese companies to fosterthe growth of numerous world-class multinational corporations. It could also be said that Zoomlion's mission is not only to build a world-class Chinese equipment manufacturing company, but also to be a world-class global operation with a complex of goals and objectives that all Chinese citizens can be proud of. This also allows the outside world to have more than a few expectations regarding Zoomlion's presence at the Bauma China 2014 expo.