Norinco maps out strategy for the future

Beidou Satellite Navigation System installed in a car at an expo last year in Yinchuan, capital of Ningxia Hui autonomous region.[Photo/Xinhua]

China North Industries Group Corp, the largest military equipment maker in the country, is navigating its way into the commercial mapping market by taking advantage of defense technologies.

Known as Norinco, the State-owned company set up a 2 billion yuan ($313 million) joint venture last month with e-commerce giant Alibaba Group Holding Ltd to provide a commercial high accuracy location and data analysis service network.

The two companies will each hold a 50 percent stake in the operation known as Qianxun Location Networks Co Ltd.

Miao Qianjun, secretary-general of the Global Navigation Satellite System and Location-based Services Association of China, said Norinco's attempt to expand its customer base through home-grown satellite technology should produce huge profit.

The Norinco-Alibaba joint venture will use location information provided by Beidou Satellite Navigation System, a Chinese-developed guidance satellite service covering the globe. The 35-satellite network was designed for military and civilian use.

"The civilian market of Beidou is getting more mature and is ready to yield profit for investors and customers," Miao said.

China put the first Beidou satellite into space in 2000 and the system started to serve commercial users two years ago.

"While the country is planning to launch more satellites in the coming years, the existing system is on track to generate 400 billion yuan in annual turnover by 2020," Miao said.

Norinco provides the ground-based system for Beidou in areas where the signals fail to reach.

Last year, China's demand for commercial satellite services increased 13 percent compared to the same period in 2013, according to an industry report from Sinolink Securities.

Beidou, along with the Global Positioning System owned by the United States, dominated the market. Before entering the navigation industry, Norinco's major business involved building battle tanks, anti-aircraft missiles and high-explosive bombs for the People's Liberation Army as well as overseas armed forces.

Norinco now aims to attract more commercial companies to Beidou after teaming up with Alibaba. In May, Norinco rolled out a subsidiary in Shanghai to develop civilian products for the satellite company.