Golden opportunity found in Chinese machinery

The huge amount of Chinese machinery operating in East Africa has provided a golden business opportunity for one enterprise.

Having cooperated with Beiqi Foton Motor Company, China's top commercial vehicle producer, for more than 20 years, Shandong Lutong Vehicles Sales and Service became the first domestic enterprise recommended by Foton to expand its business in East Africa in 2015.

Early that year, Zhang Zhongduan from Shandong Lutong went to Kenya to start a four-leg market survey in Tanzania, Mozambique and Gabon.

"After conducting in-depth market research, paying visits to various cities, doing data analysis and learning about customs and Chinese-funded enterprises in Kenya, we decided to invest there without going to other countries," says Zhang, CEO of Roton Africa.

"During the research, I found there are many medium- and heavy-duty trucks from Foton in Kenya," Zhang says. "Roton Africa started to operate as a service company for Foton in the country."

That year, Zhang had a tight schedule for setting up his African business. In April, he completed the market survey report; in May, he signed an agreement with Beiqi Foton Motor to be its agent in East Africa; in June, he visited Kenya with his assistant in preparation for registration; in July, he completed registration for Roton Africa in Nairobi and Mombasa; in August, he rented a 1.2-acre piece of land in Mombasa, the largest port city in Kenya.

"The site was an abandoned community hospital belonging to a church," says Zhang. "It's in a wonderful location as it is the only way to get into and out of the port city."

Zhang signed a contract to lease the site for 30 years and spent seven months afterward going through all the formalities of environmental assessment and getting business and land-use permits.

Construction started in March last year. He dismantled the old buildings and had built a standard 4S - sales, service, spares, survey - station by the end of August. The station was fully equipped by December.

Today, the business of Roton Africa includes sales of medium- and heavy-duty Foton vehicles, repairs, spare parts and machine sales and rental.

The company has established a primary distribution network, commercial vehicle maintenance stations, spare parts warehouses and offices in Nairobi and Mombasa. It has developed a secondary sales network and spare parts network in Kisumu, the third-largest city in western Kenya.

It also procures, repairs and rents Lovol excavators, loaders, road rollers and land levelers.

"Roton Africa applies Foton Daimler's philosophy of 'leading technology and complete care' to provide a professional 24-hour all-round process service," says Zhang, adding that the company does repairs in both Nairobi and Mombasa.

Next year, it plans to set up another outlet in Nakuru, the fourth largest city in Kenya, which will specialize in agricultural machinery such as tractors, harvesters, sowing machines and ditching machines, Zhang says.

"In this way, we are able to completely cover the major cities of Kenya," he says. "After one year, we plan to spread through the whole eastern Africa region."

Roton Africa stocks all Foton components as well as common parts for First Auto Works (FAW), Beiben Trucks, Shacman and China National Heavy Duty Truck Group (Sinotruk).

"I wish to build a central warehouse of components for all Chinese trucks in Kenya to provide convenient service for clients," Zhang says.

He says that the company has held discussions with Weichai Power about a franchised shop and will set up a Weichai engine warehouse in East Africa to deal with the many trucks powered by its engines, promising great business potential.

The company also invested in construction machinery as many Chinese companies, state-owned and private, are engaged in the construction of bridges, roads, hydropower and railways in Kenya, boosting demand for products.

Zhang says he aims to keep Kenya as the company's East Africa base.

panzhongming@chinadaily.com.cn