October 16, 2007 -- Sany Heavy Industry Co said on Monday it would invest over $120 million overseas in an expansion plan that would begin production by the end of next year. While Sany's investment plans are relatively small and spread over four continents, they could turn it into the first Chinese firm to make construction equipment in North America. "We have to get closer to our markets and our customers," Chairman Liang Wengen told reporters on the sidelines of the Party Congress. "The proportion of our exports is growing all the time," he said.
Sany, based in the central province of Hunan, will invest $60 million separately in the United States and India, and expects production to begin by the end of next year in those two facilities. The firm is building a site near Atlanta, where it will assemble gears for the U.S. market, executives had said earlier. And the company has already been selling concrete pumps and mixers in the United States on a trial basis.
The company's planned investment in Belgium will be somewhat less than those two investments and the move into Brazil is still in the early stages of planning, he said. "Sany will only export about $200 million this year, compared to the 12 billion?($1.6 billion) in total sales expected," said the 51-year-old executive.
The U.S. factory would potentially make Sany the first Chinese construction equipment maker to own a plant in North America, home to industry giants such as Caterpillar Inc. and Terex Corp. The company reinvests 5 percent of sales in research and development to help it penetrate more developed markets, the Holy Grail for Chinese construction equipment makers. "We are very committed to research to improve our quality," he said.
Sany has attracted the attention of foreign investors, but Liang said he has limits to accepting foreign cash. "We were in talks with a foreign investor last month, but they wanted a controlling stake so the talks failed. I will not give up control of Sany or give up our brand name," he said. Last month the company was in talks with a foreign investor, but talks broke off when the other party insisted on taking a controlling stake.
Sany competes with Xugong Group Construction Machinery Co, China's largest construction equipment maker.
Source: Reuters News
