Rays of hope amidst slow down

“There is a clear indication that high-valued-added products are welcome in foreign markets, however, the lower-end products will lose market share. There is an urgent need for companies to transform and upgrade their products,” said CCMA in a report that was released in October. Future trends

To support economic development, the central government has released a series of policies to stabilize the country’s economic growth in 2014. These policies will benefit construction on infrastructure facilities, water conservation projects, strategic emerging industries, urbanization, energy projects, high-speed railways, which are closely related to construction machinery businesses.

Experts believe that those policies will have a positive effect on the construction machinery sector in the fourth quarter of 2014.

However, some experts said although the government has released stimulation policies, the construction machinery sector will not see a strong rebound in the fourth quarter of 2014, because the industry will be affected by many other factors such as the changing international market and over-capacity.

Though construction machinery businesses face challenges in the remainder of 2014, companies are positive about the future.

Sany is optimistic about its growth prospects in the medium-to-long term thanks to the continuous improvement in the country’s regional, industrial and urban-rural structures.

The company cited increased infrastructure demand in railways, urban mass transit and water conservancy projects and opportunities brought about by the development of the emerging economies as reasons for optimism.

Visitors enter the expo center to visit bauma China 2012. PHOTO PROVIDED TO CHINA DAILY

In the first six months of this year, Sany sold more concreting machinery than any other competitors worldwide and more excavating machinery than anyone else in China. The sales were worth 10.12 billion yuan ($1.65 billion) and 4.88 billion yuan ($794 million) respectively.

“China’s construction equipment industry is experiencing an adjustment period. I think it is a normal business cycle that I have seen many times in other regions. We have our internal forecasts and we believe in China in the medium and long term, the market continues to develop and it will be fantastic. There is still an incredible demand for infrastructure, roads and cities, which will benefit Volvo CE in the coming future,” said Martin Weissburg, president of the Volvo Construction Equipment.

Companies are also expanding quickly in overseas markets to support growth. For instance, Zoomlion is building manufacturing bases in Russia and India. Its revenue in the Middle East and America has increased by 100 percent from 2013. Sany also achieved rapid expansion in Africa and Latin America.

Industry insiders believe that the investment will focus on three areas in the construction machinery sector in the future, firstly, leading companies will continue to expand product lines and enhance its premium products, manufacturing capacity and exports capacity; secondly, companies will continue to expand their industrial chains by setting up research and development centers and launch core spare parts manufacturing projects and manufacturing bases; thirdly, leading businesses will integrate resources through mergers and acquisitions both in domestic and international markets.