Visitors at Bauma China 2010, the International Trade Fair for Construction Machinery, Building Material Machines, Construction Vehicles and Equipment, in Shanghai on Tuesday. The show has become a gathering for almost all top machinery makers from home and abroad. [Photo/Xinhua]

No 4 loading tool producer benefits from increase of energy efficiency

SHANGHAI - Shandong Lingong Construction Machinery Co Ltd, China's fourth-largest producer of loaders, with the backing of majority investor Volvo, has taken the lead among domestic players to restructure its product line-up and cater to the rising demand for energy-efficient machines.

"From a long-term perspective, engineering machinery makers must develop more energy-saving products to win in the fierce competitive market and lower usage costs to provide added value to our customers," company Chairman Wang Zhizhong said.

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Wang said that in the first half of this year alone, energy-efficient products contributed to nearly half of the sales, a sizable increase as the company sold the same number of loaders in 2009.

"Energy efficiency will become a key trend for local engineering machinery makers as customers start paying more attention to fuel consumption costs," said Guo Qiang, an analyst with First Capital Securities.

Wang told China Daily that Shandong Lingong's 2010 revenue will grow 70 percent over last year. The company, based in Linyi, Shandong province, will report a 1 billion yuan ($151 million) profit by the end of this year, a sharp increase of 340 percent over last year.

He said the company aimed to achieve sales of 30 billion yuan in 2012 and 50 billion in 2015.

The company now plunges at least 350 million yuan, 5 percent of its yearly revenue into research and development of energy-efficient products, according to Wang.

Its loaders have reduced their energy consumption by 10 percent, as certified by the General Administration of Quality Supervision, Inspection and Quarantine.

By optimizing transmission and hydraulic systems, Lingong aims to build loaders by next year that cut fuel consumption by 20 percent or more.

"In the highly competitive Chinese construction machinery industry, Lingong is sparing no efforts in realizing our goal of being in the top three or even become a world-famous Chinese brand in construction equipment," said Wang.

"We are fully confident that through the cooperation with Volvo Group, which owns 70 percent stake in us, Shandong Lingong will set a new high standard in the industry in China to better serve the needs of various stakeholders."

The engineering machinery industry in the world's second-largest economy is expected to have a capacity of 1.4 million units this year, with sales revenue of 400 billion yuan.

The National Development and Reform Commission forecast that the sales revenue of China's engineering machinery industry will more than double to 900 billion yuan in 2015.