LiuGong chairman Zeng: Company ‘confident’ in global market strategy
Tina Grady Barbaccia | March 5, 2014
Despite global economic challenges, Liugong is not only “confident” in its global market strategy, but it has the numbers to show its success.
The company achieved an operating profit that increased 34 percent and 9.95 percent net profit increase during 2013, compared to 2012, Zeng Guang’an, chairman of Guangxi LiuGong Machinery Co., Ltd. and president of Guangxi LiuGong Group Co., Ltd., told editors during a March 4 press conference at ConExpo-Con/Agg 2014 in Las Vegas.
“It is definitely good news for us and the whole [construction] industry,” Zeng said. “We are committed to this market.”
LiuGong North America closed 2013 with a record-breaking month in last December in the North American market, making its fourth quarter of last year as the most profitable year. The company achieved more than 150-percent year-over-year revenue growth for 2013, with four consecutive profitable quarters since Liugong started its North American business in 2008
In 2013, it took three separate companies that were not profitable as separate entities — LiuGong CE (Construction Equipment), Dressta North America and LiuGong FL (Forklifts) — and combined them.
“We combined three losing companies,” said Marc Dowdell, president of Liugong North America, “and through capitalizing on economies of scale, training of cross functional teams, increased hiring of industry professionals, and an expanding dealer network, LiuGong North America was not only profitable for the year, but profitable for every quarter.
The key, Dowdell said, was to expand the aftermarket sales division and expand cross-training expertise across three companies. “Dealers were also key in this expansion,” Dowdell said. “In 2013, we formed alliances with key banking partners as well.”
This was an important step in becoming a major OEM in North America as well as providing a return for stakeholders, Dowden said. “We continue to make capital investment in LGNA and our all-important dealer network — providing an expanded product line, floor plan financing, and what we believe is the best complete machine warranty in the market.”
Dowden also credits part of Liugong’s success to its ExtraCare warranty, noting that “every piece of Liugong and Dressa equipment is sold with a one-year free warranty.”
This year will come with new challenges. However, they are exciting ones, Dowden said. A week ago, Katy, Texas-headquartered LiuGong North America, moved to a larger interim facility to support its expanding dealer network.
The company has identified a 35-acre tract of land just outside of Katy, Texas, where the North American facility is currently located, to build a new facility that will have a complete training center, paint booth, equipment proving ground as well as other important parts of the business.
Fast Facts about LiuGong
LiuGong ranks as the 20th largest construction equipment manufacturer in the world. In 2012, LiuGong had $2 billion in sales revenue, selling more than 42,000 total units.
The company is a leader in the design and production of wheel loaders. In 2012, LiuGong held nearly 14.4 percent of the global market share in wheel loaders.
It is a company of many firsts, including being the first company in China to begin manufacturing heavy equipment and the producer of China’s first modernized wheel loader in 1966. LiuGong has been integral in China’s modernization and infrastructure
LiuGong has a total of 24 manufacturing facilities worldwide. The company employs more than 12,000 people, including more than 1,000 engineers working in three world-class research and development facilities. In 2012, LiuGong invested more than $81 million into its R&D program.
- LiuGong now has 16 product lines including wheel loaders, excavators, bulldozers, motor graders, pavers, cold planers, skid steers, backhoe loaders, rollers, forklifts, truck mounted cranes, crawler cranes, pipe layers, mining dump trucks, dynamic compaction machines and concrete equipment.
- The company supports its global product lines with a growing network of more than 320 dealers across six continents in more than 130 countries. The LiuGong dealer network has more than 2,650 sales outlets around the world.
Supporting the dealer network are nine regional offices with engineering, marketing and service support, coupled with seven overseas parts depots located strategically throughout the world which ensure rapid replacement of parts and servicing of equipment.
Regional offices are currently located in Africa, Brazil, United Arab Emirates, Netherland, India, Poland, Singapore, Russia and the U.S. Further regional offices are continuously added as LiuGong grows.
Key Milestones for LiuGong
1958 – LiuGong Machinery Corp. (Guangxi LiuGong Machinery Co. Ltd.) was founded in Liuzhou, China. LiuGong routinely ranks among the largest global wheel loader manufacturers.
1966 – LiuGong launched China’s first modernized wheel loader Z435.
1987 – LiuGong introduced Caterpillar technology.
1993 – LiuGong began trading on the Shenzhen Stock Exchange.
1995 – LiuGong partnered with the German transmission components manufacturer, ZF Friedrichshafen AG, to open a joint venture in Liuzhou.
2000 – LiuGong acquired Jiangyin Construction Machinery Co., Ltd to enter the roller business.
2001 – LiuGong began building excavators.
2003 – The company entered the compact machine business.
2004 – LiuGong entered the road machine business; establishes its first oversea division in Australia.
2006 – Production volume of wheel loaders exceeded 100,000 units.
2007 – The company acquired Anhui Crane Co., Ltd. and established the LiuGong India division.
2008 – LiuGong established divisions in North America and Latin America.
2009 – India wheel loader and manufacturing plant began operation.
2010 – The firm formed divisions in Europe, Asia Pacific, the Middle East and South Africa.
2011 – Cummins and LiuGong announced a joint venture to produce mid-range engines.
2012 – LiuGong completed acquisition of HSW (Huta Stalowa Wola) Dressta in Poland, a premier manufacturer of bulldozers, giving LiuGong a strategic footprint and access to markets in Europe.
2012 – LiuGong founded second joint venture with ZF, ZF Liuzhou Axle Co. Ltd., to develop and produce machine axles for the Chinese Market.
2013 – LiuGong found JV with Wuling Group to engage in the design, research and development, production and sale of engineering machinery, forklifts and other industrial vehicles sheet metal parts, as well as cooling system. LiuGong Poland acquired ZZN Transmission Plant.
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