Farm machine maker looks to greener pastures

Hao estimates that this year sales revenue from Xinjiang will account for one-fifth of the total, the rest coming from the other two regions.

The company is also seeking to export. It plans to build a 3.3-hectare exhibition center at a land port in Ili Kazakh autonomous prefecture, in northernmost Xinjiang, to demonstrate Moshine products to potential customers in central Asia, and groundbreaking on the center will be done this year.

Delivering machinery to Inner Mongolia and Northeast China is an expensive exercise, and the company has decided to open several factories in these major markets. "This saves 20 million yuan a year," Hao says.

Hao says strong government support is one of the major stimulants for his growing business.

According to the Ministry of Agriculture, the government subsidized agricultural machinery to the tune of 17.5 billion yuan last year, and it has pitched in 20 billion yuan so far this year to the end of last month.

In some places subsidies for agricultural machinery can cover 50 percent of the price, Hao says.

Besides best-selling products such as the corn harvester, Boman designs and produces machines for niche markets, including machines that pick cotton and pepper and unhusk walnuts.

"Demand for these machines is not that great - only 10 to 20 units every year - but the profit margin can be as high as 100 percent," Hao says, adding that such machinery frees many laborers from the field, thus reducing overheads significantly.

Manual pepper picking can cost 1,000 yuan a mu (about 0.07 hectares), but done by machine the cost is 400 yuan to 600 yuan.

While imported machinery is better, Hao says, his company's products win the day in price and good after-sales service. For example, an imported cotton-picking machine can cost 3 million yuan, while a similar one from Boman costs 800,000 yuan.

As for after-sales service, Hao says: "During the harvest season last month we sent 200 to 300 technicians to major agricultural areas in Xinjiang, and if we got a call from a customer we arrived at the site in an hour to save delays with harvesting."

But on some counts machines fail to match their human counterparts, one of those being flexibility, and Hao says small adjustments need to be made to machines so they suit particular markets. "Even a plow needs to be designed for a local market, otherwise it cannot plow deep enough. We have to carefully study the local market before we enter it."

Replacing human minds and hands with machines on the farm poses other challenges, too. For example, Hao says, unless cotton crops are spaced correctly and evenly, machinery can damage them during harvesting.

wangchao@chinadaily.com.cn