The home advantage

25 July 2017


In the second of a two-part series, Stuart Anderson, president at Chortsey Barr, looks at the role of Chinesebased traders in selling new and secondhand domestic cranes to overseas customers.

China is home to many hundreds of trading/ import & export companies. Most of these are concentrated along the East Coast, mainly in the port cities of Shanghai, Tianjin,

Guangzhou, Shenzhen, Nanjing and in Shandong and Zheijiang Provinces. Also, with Xuzhou in Jiangsu Province being China’s largest construction machinery manufacturing centre, the city is home to quite a number of important machinery traders with direct ties to the manufacturers, particularly XCMG. This isn’t surprising given XCMG’s perennial 50%+ market share which, since 2005, has seen sales of well over 100,000 truck cranes domestically.

Typically, most used equipmenttraders are small businesses with very-limited technical capabilities to conduct proper-testing, qualifi ed repairing and servicing of their inventory. However, there are a number of well-established trading companies concentrating on the overseas sales of Chinese mobile cranes.

These businesses are a level above the typical used-crane seller with the majority of their sales being brand-new cranes. The used cranes sold by this class of trader are typically of a higher-standard and can benefi t from the traders’ close-ties with manufacturers. The majority of the new cranes sold by these traders are purchased directly from the manufacturers, with XCMG being by far the most prominent. Indeed, several are authorized dealers who purchase cranes, machinery and parts for sale ex their own stock. In addition, they will also order specifi c new cranes to meet special customer requirements or market-demanded specifi cations. When required they will seek to acquire used, traded-in or repossessed cranes for customers seeking lower-priced machines, but these are exceptions.

Your local guide

Amongst the benefi ts that these companies claim is that they can often obtain ‘best’ dealership prices. A major advantage over overseas distributors enjoyed by these companies is that, for mainstream, standard-specifi cation models, they claim to be able to normally provide delivery within 15-days of order and, in as much as 70% of cases, can offer immediate delivery. Typical payment terms are 30% deposit with order and the 70% balance payable before shipment or against the copy of original Bills of Lading for established customers. Normal payment is by Letter of Credit and 90% of export shipments of machines is by Ro-Ro.

All of the leading traders offer some level of international parts and service support as well as product warranties that typically cover 12-months or 2,000 hours. Customers would do well to obtain full details of such services.

Typically, these companies welcome regular visits from international delegations of actual and potential customers. Routine services include booking hotels, airport pick-ups, translation in several languages including English, German, Spanish, French and Russian, and escorted visits to manufacturers. As appropriate for parts shipments and small units such as knuckleboom cranes and boom trucks, the quality and variety of packaging for export is quite impressive. Where practical small machines are shipped in freight containers. Extensive use is made of timber to protect cabs, and crawlers are split into transportable modules where necessary.

In profile

HAIG was established in 2012 and is an authorized XCMG dealer while also trading in several other leading Chinese brands including Changlin (Sinomach), Liugong and Zoomlion. Its product lines span the complete spectrum of cranes and lifting machinery as well as materials handling, port machinery, earthmoving, concrete and roadmaking machinery. HAIG has annual revenues of around $50m, selling on average between 600 and 700 units per annum. Some 50-60% of revenues are through exports to countries throughout Asia, Middle East, Africa, Russia and Latin America.

In recent years HAIG has successfully sold XCMG crawler cranes to markets as diverse as Bahamas, Chile, Ghana, Guinea and Pakistan with its most notable sales being a 250-tonner to Chile (2014), a 130-tonner to Guinea (2016) and a 260-tonner to Pakistan (2016). Algeria is a strong market for HAIG with recent XCMG deliveries including several 25 and 35t truck cranes, six QTZ 80 tower cranes and several boom trucks. HAIG is especially strong across the African continent as well as being active in the Caribbean, South America, Azerbaijan and Kazakhstan.

One of the larger sellers of mainly Japanese truck and crawler cranes is Junking International Group established in 1995 and based in the Songjang area of Shanghai with an inventory claimed to number some 185 units.

Shanghai Ruyi Trading, based in Shanghai deals principally in used Tadano and Kato hydraulic cranes with its main markets being Iraq, Saudi Arabia, the UAE and Kuwait. Shanghai-based Evangel is also an authorized XCMG dealer that exports to more than 60 countries. Like HAIG, Evangel sells the full spectrum of lifting, earthmoving, roadmaking and access machinery. While XCMG is Evangel’s primary source of products, the trader also sells Terex (Sinomach) Toplift, Zoomlion,

Shenyang North Traffic “Kaifan” and Sany truck cranes; FUWA and Zoomlion lattice crawler cranes; Zoomlion ATs and Hefei Smarter tele boom crawler cranes. However, XCMG cranes represent the vast majority of Evangel crane sales with its top truck crane markets being Algeria, Iraq, Russia and Argentina while for crawler cranes Evangel’s most successful markets are Peru, Russia, Iraq, Brazil and Indonesia.

Shanghai Oriemac Machinery & Equipment established in 2008, trades in mobile cranes as well as earthmoving and road-making machinery with key markets including East & North Africa, Mexico and the Philippines. For cranes, its main focus is on XCMG truck cranes and Sany crawler cranes. Recent successes include 25t XCMG truck cranes sold to Algeria and Djibouti and 50t and 100t Sany crawler cranes to Mozambique and Peru.

Changzhou Yamar Koope International, is another dealership, based in Xuzhou, with very close ties to XCMG – indeed its website is www.cranesxcmg.com. Established in 2005 ‘Yamar’ concentrates on the export of XCMG mobile, crawler and truck-mounted cranes and parts, offering 1-year warranty on sales. Its primary market focus is on SE Asia and Africa with a recent notable sale being for 85t, 100t and 150t XCMG crawler cranes to Southern Africa.

Sinoway Industrial (Shanghai), established in 2005 also offers a broad range of construction machinery and has recently enjoyed particular success in crane sales to South Africa. This is a company that re-brands its products as ‘Sinoway’ with, for example, truck cranes bearing the pre-fix SWTC. Sales include pairs of 25t and 50t XCMG truck cranes (branded SWTC 25B5 and SWTC 50H) and a pair of Terex (Sinomach) Toplift 055 branded SWTC 55, while an 80t XCMG XCT 80 also sold to South Africa was branded SWTC 80W.

Xuzhou Fanya Import & Export, based in Xuzhou is a business that trades in cranes and construction machinery as well as its own line of hand tools. Most of Fanya’s export sales of cranes are XCMG truck and truck-mounted cranes with the occasional XCMG crawler crane. Main markets are East and South Africa and SE Asia. One recent sale was of a 50t capacity XCMG QY 50KA truck crane to a Vietnamese customer who picked up the crane in Xuzhou and proceeded to drive it home over a period of 4-days. In addition to XCMG this company also sells the neighbouring XJCM line of RTs having sold a 30t QRY 30 to Indonesia.

Also, based in Xuzhou is Xuzhou Zhongxu Construction Machinery, founded in 2005 and specializing in sales of XCMG mobile, crawler, truck-mounted and tower cranes. Over the past few years Zhongxu has sold more than 30 XCMG truck cranes of 25–100t capacity with the 70t QY 70K-1 and 100t QY 100K-1 proving particularly popular in Chile and various parts of Africa. Zhongxu ranks amongst the most-successful domestically-based exporters of XCMG cranes with its main markets being Africa (Algeria, Kenya & South Africa), South America (Chile,

Argentina & Peru), the Middle East (Iran, Saudi Arabia & Oman) and SE Asia (Indonesia, Philippines & Sri Lanka). Zhongxu has also enjoyed significant successes selling over 50 XCMG knuckle boom loaders with major sales being to Indonesia, South America and the Middle East. Almost all of these were shipped well-packed in 40ft ISO freight containers for local truck-mounting.

Xuzhou Focus Industry Group, was established in 2010 and offers XCMG and Zoomlion mobile and crawler cranes as well as XCMG truck-mounted cranes. An interesting recent sale was a 16t capacity 40tm XCMG side-loading container handler model SQ 16ZK40 (MWG 16) to a customer in the Republic of Georgia. Also during 2016 Focus sold a third 12t XCMG QY 12B-J to an Algerian customer, a 25t QY 25KA to Kenya and a 50t QY 50KA to Vietnam.

Xuzhou Silkway also enjoys veryclose ties with XCMG with particular emphasis om the markets of Congo, Ethiopia, Mongolia and Russia. Notable crane sales successes include five 50t XCMG QY 50KA truck cranes to East Africa and a 450t XCMG QUY 450 crawler crane supplied for port construction in Congo. Quindao Dawnshine Import & Export, is a subsidiary of Dawnshine (Hong Kong) with registered capital of $1.6m and with branches in Shanghai and Guangzhou. Dawnshine specializes in the export of industrial plant and equipment, construction machinery, industrial materials, tools and parts to SE Asia, Africa, Middle East,

South America and Russia. Crane lines represented include XCMG, Zoomlion, Sany, FUWA and Liugong. Jinan Shine International Trade has annual sales varying between $5 and $10m primarily involving XCMG and Zoomlion truck cranes and various brands of forklifts. Some 40% of its exports go to Africa with a recent success involving a batch of four 50t XCMG QY 50KA truck cranes to Algeria.

Also based in Jinan in Shandong Province, Jinan Good Reputation International Trade, has close ties with XCMG and focused on the crane business with activities in Russia, Ukraine, South America, Cuba, Saudi Arabia and Algeria.

Shanghai Dobest Construction Machinery concentrates its export trading efforts on XCMG cranes and construction machinery with a focus on the markets of East Africa (Kenya and Tanzania) and North Africa (Algeria) as well as South East Asia. Dobest has been particularly successful with XCMG truck cranes of 20t ,25t and 50t capacity in these markets. In addition Dobest has enjoyed success selling Hefei Smarter tele boom crawler cranes in SE Asia.

Amongst the larger crane traders is Hong Kong Yutong Industry with its subsidiary Global (Shanghai) Machinery established in 1996. The company’s Shanghai yard covers 5,000 sqm and concentrates on crawler cranes of 50–250t capacity (Sany, Zoomlion, Kobelco, Sumitomo and Hitachi) and truck cranes (Tadano, Kato and XCMG).

Of course, even in this digital age, physical proximity of the seller relative to customers and markets can prove vital in achieving sales success. Certainly, the Chinese in particular have long tried to sell heavy machinery on-line. But, given China’s vastness, its multiple languages and cultures, local connections can prove decisive in winning a deal - especially when it comes to costly second-hand equipment. Foreign language skills and regulatory knowledge are key for Heihe Baojin Economic & Trade Company which has a good business in the sale of XCMG cranes into Russia. Another firm, Dandong Tianfu Trade is based in Yuanbao, literally directly across the Yalu River from North Korea and amongst its exports to that isolated country are Zoomlion truck cranes.

The benefit of a close-proximity to the market was illustrated in the Vietnamese market in 2016 which proved to be an extremely strong year for sales of crawler cranes with over 200 units imported.

Several Chinese trading companies were involved in this trade but the most successful were three companies based in the Guanxi Province city of Dongxing in the deep southwest of China. Dongxing is a small city lying on the Beilun River (or Song Ka Long) which forms the border between the PRC and Vietnam and is only 220km from Hanoi. Dongxing Heying Trading and Donxing Tongyuan Trading were the most successful crawler crane sellers.

Although some new crawler cranes of up to 250t capacity were sold, the majority were used cranes, some of which were very old indeed. While brands such as Sumitomo and Hitachi continue to be appreciated for their quality and durability, by far the most popular brand in Vietnam is FUWA, and indeed the products of its predecessor company Fushun.

In addition to contemporary hydraulic FUWA crawler cranes of up to 120t capacity being purchased, large numbers of the old small Fushun mechanical crawler cranes of 15–25t capacity were in high demand.

This demand is particularly driven by the growing importance of dynamic compaction work being done by crawler cranes. This is not only the case in Vietnam, but indeed in China and across South East Asia.

All of the Chinese manufacturers have developed ranges of special dynamic compaction versions of their crawler cranes and in particular, Yutong Heavy Industries has enjoyed huge success in this application.

However, for this most challenging of applications, as can be seen around the world, moreconservative customers sometimes prefer to employ heavy and tough old mechanical cranes nearing the end of their working lives, like the old Fushuns.

Kazakhstan too has developed into a highly-important crane market for the Chinese. Based in Urumqi in China’s far Northwest Autonomous Province of Xinjiang Uyghur, Trading Company Xinjiang Hengyuan Xin International recently sold two 65t BQ-Tadano GT-650E 65t capacity truck cranes across the border into Kazakhstan.

Another local competitor, Xinjiang Beigelan Import & Export Trading Company, also continued to benefit from its advantageous location selling market-leading XCMG truck cranes across the border.

Considering the harshness of Urumqi’s environment - it is officially the world’s most remote city from any sea, surrounded by an arid landscape as well as being one of China’s most polluted major cities - the quality and reliability of cranes and equipment employed there, is absolutely fundamental.

Deep product and application knowledge remain critical when introducing new product concepts or highly-specialised machinery to the market.

Hunan Heyi International Trading based in Laodo, Changsha, has successfully exhibited these qualities in opening the Singaporean market for Hunan Holding Heavy Industrial Company with the sale of the first two Holding 40t HDTC 40s and a 55t HDTC 55 tele boom crawler cranes. After all, Holding is a new name - having only been in business since 2013 - and the telecrawler crane is still new to many customers.

Similarly, Zhuhai Qianxiang Import & Export Company, based in Guangdong, recently put both its knowledge of foundation applications and its geographic proximity to good use in neighbouring Macao.

As well as delivering heavy piledriving equipment and two tough, old Sumitomo LS-248RH 150t crawler cranes, this trader also succeeded in placing two new Holding HDTC 55 telecrawlers

A Zoomlion crawler at work on a nuclear power station in Jiangsu, home to many of the dealers mentioned here
An XCMG XCA100 E all terrain
A Sany SRC55, in the colours of the company’s JV with Palfinger
A Zoomlion crawler at work on a nuclear power station in Jiangsu, home to many of the dealers mentioned here