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Sany seeks large and localized European presence

By Tuo Yannan (China Daily)

11:05, May 26, 2013

Sany Germany GmbH - the German arm of Changsha, Hunan-based Sany Heavy Industry Co Ltd - aims to surpass 100 million euros ($129 million) in sales in 2015, after it acquired a German company last year, the company's executive told China Daily.

In 2012, the Chinese company announced it had bought German concrete pump maker Putzmeister for about $470 million, the largest direct investment a Chinese company has made in Germany.

"Sany has already invested more than 500 million euros in the European market, (after the merger)," Sany Germany GmbH's general manager Bart Decroos said. "Its aim is to more than double the growth rate and size in the next five years."

Decroos has been in the machinery industry for more than 20 years. He worked in Japanese and US companies before joining Sany in 2012.

Still, he has found expanding Sany's business in Europe challenging after the merger.

Branding is the first hurdle for Chinese enterprises entering the European market.

"All Chinese companies are facing the suspicion of low prices, and big doubts about Chinese products," Decroos explained.

"This is the very hindrance we have to overcome."

The company decided to import some components - rather than entire machines - from China. "In the past, we designed our products in Europe, made them in China with imported components and shipped them back to Europe," he said.

But this was inefficient, he believed. Decroos said it took Japanese companies 20 years to adapt to the European market and culture. Sany has looked at which components can be imported from China to localize its production in Europe.

Compared with a few years ago, component parts, which were then entirely imported from China to Europe, have dropped into current 60-70 percent in volume.

Sany Germany GmbH is one of many Chinese companies looking to become large and localized in Europe.

Its first task was catering to the market.

"Before, Chinese companies wanted to jump into every area, but that is not the way European people do business," Decroos explained. "Starting from last year, we narrowed down our product portfolio."

Sany focused on reach stackers to cater the European market. It built a 250,000-square-meter plant near Dusseldorf and started to produce the vehicles this year.

Quality and production department manager Ben Gollner said the factory can produce 100 reach stackers a year.

Sany also localized its workforce. Previously, more than half its employees were Chinese but now about 80 percent of its 150 workers are European.

Last month, it sent a delegation that included eight key employees to China to learn Chinese enterprise culture. Among the delegates was sales administration coordinator Janina Weigel. "We always had 'wow' experiences during the trip (because of) the speed Chinese companies are picking up new technologies and investment in R&D."

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