New orders falling for China's machine tool makers

BEIJING - New orders for China's machine tool manufacturers declined for the 22nd consecutive month in March amid the economic slowdown, according to data released on Monday.

"We've seen no improvement in the first three months of this year," said Chen Huiren, deputy secretary-general of China Machine Tool and Tool Builders' Association (CMTBA), which released the data.

Chen made the comments while attending the China International Machine Tool Show 2013, which opened in Beijing Monday.

Chen attributed the shrinking demand in China to the rebalance of the global economy, saying an industrial upgrading for the sector had never been so pressing.

Since 2002, China has kept its position as the world's largest machine tool consumer for 11 consecutive years.

CMTBA data showed sales of metalworking machine tools amounted to 38.28 billion US dollars in China last year, accounting for 30 percent of the world's total consumption, while the country's machine tool output reached 27.36 billion dollars, or 45 percent of the world's total.

"For machine tool builders, the time of 'you will win if you are in' is over," said Guan Xiyou, chairman of Shenyang Machine Tool Co., Ltd., China's largest machine tool manufacturer with more than 14,000 employees. ' "We're now entering a transition period," Guan said.

The company reported a net profit of only 23.29 million yuan (3.73 million US dollars) last year, a slump of 78 percent from previous year.

China's industrial upgrading, however, helped push up the imports of metal-cutting machine tools, with a year-on-year growth of 6.03 percent last year, CMTBA data showed.

Most of Chinese machine tool makers can only produce low-end equipment, while relying heavily on imports for high-end computerized numerical control machines, thus creating opportunities for foreign manufacturers like German machine tool maker EMAG Group and Swedish manufacturer Sandvik Coromant.

EMAG, the leading vertical pick-up turning machine producer, is set to invest 4.9 billion yuan in a new plant in the city of Jintan of east China's Jiangsu province.

Li Yishan, general manager of Sandvik Coromant Greater China, said the Swedish supplier of metalworking tools also plans to establish a new application center in the city of Langfang of northern China's Hebei province, to respond to demand from clients more effectively.