Liugong Heavy Machinery's 20th Anniversary of Going Global ④ : A Thousand Sails Competing, Rowing hard against the Waves to Open up a New Situation

How to evaluate whether an enterprise's internationalization path is successful? Some people focus on the export rate of its products, some take the size of the enterprise's internationalization map as the criterion for judgment, and some care about the proportion of foreign employees...

Admittedly, it is difficult to have a standard answer to this question. However, in today's world, how to adapt to the international trend and resist risks and challenges is of vital importance to international enterprises that dominate the globe. Over the past two decades, from venturing into the deep blue to surpassing the azure, Liugong's journey of going global has fully demonstrated the characteristics of the growth path of Chinese multinational companies: with the tenacity of "gritting one's teeth" and an open and inclusive attitude, it has faced difficulties head-on, actively seized opportunities such as the "Belt and Road Initiative" and the "RCEP", and contributed to the strong overseas expansion of "major national equipment".

Under the great changes unseen in a century, Liugong has continued to make efforts in its overseas market: In 2021, the sales volume of Liugong's overseas complete machines increased by more than 70% year-on-year. In the first half of this year, Liugong achieved its best half-year sales revenue in the history of its international business. Despite the overall decline in the domestic market, Liugong's overseas market has forged ahead against the wind, demonstrating greater determination. This giant ship of Liugong is now sailing against the waves.

PART01 Riding the Waves: Seizing the Belt and Road Initiative

The Belt and Road Initiative is a fiercely contested area for the construction machinery industry.

In 2021, the COVID-19 pandemic continued to spread globally. With the port closed and logistics disrupted, Liugong has also encountered "transportation difficulties" : the transportation channels for about 40 loaders originally scheduled to be sent to Kazakhstan by road have been blocked. How to ensure that goods are not delayed and how to control transportation costs while maintaining efficiency?

On the morning of May 18, 2021, the first China-Europe freight train from Guangxi (Liuzhou - Moscow) departed carrying over 60 pieces of Liugong equipment, with a total journey of approximately 11,000 kilometers. The opening of the China-Europe Railway Express (Liuzhou - Moscow) has saved at least two weeks of transportation time compared with Liugong's traditional sea freight loading and trailer transportation to Moscow. Unloading goods along the railway route also has certain benefits in terms of cost optimization. Luo Guobing, vice president of Guangxi Liugong Machinery Co., LTD., said.

Not only should the products be exported, but also the services should be sent out. The "LiuGong CARE" service brand has gained recognition along the Belt and Road Initiative with its rapid response service capabilities and professional and reliable service quality. In Kyrgyzstan, they completed the installation of the designated brand's cold start device in just five days, setting a new "Liugong speed" record. In Kazakhstan, they provide on-site professional training for operators who are not proficient in the equipment and promptly solve customers' problems. In Pakistan, they completed the replacement of parts for a bulldozer in the absence of professional maintenance tools, working from day to night...

The Belt and Road Initiative is an opportunity for Liugong to expand its global presence. Since the proposal of this initiative in 2015, Liugong's business coverage rate in countries along the Belt and Road has exceeded 90%. Seizing the Belt and Road Initiative has injected strong impetus into Liugong's internationalization.

PART02 Sailing: Laying Out the RCEP

This year marks the first year since the RCEP officially came into effect. Standing at the historical opportunity of open development and strengthened local economic and trade cooperation among the member states in the region, Liugong has also ushered in a new round of expanded opening up.

In April this year, the first train of Liugong's cross-border train service between China and Vietnam departed. In July, 132 pieces of Liugong equipment were neatly lined up at Qinzhou Port and successfully exported to Australia and Indonesia, two RCEP member countries, aboard the "COSCO Jinggangshan" vessel. This is a vivid portrayal of Liugong's proactive embrace of the new opportunities brought by RCEP.

As an important market for China's mechanical and electrical product exports, the RCEP region is also one of Liugong's core overseas markets. On August 11th, Guangxi Liugong Machinery Co., Ltd. was recognized by Nanning Customs as an authorized exporter under the Regional Comprehensive Economic Partnership (RCEP), allowing it to enjoy tariff preferences under the free trade agreement at any time. The trade arrangement has become more convenient, and the international competitiveness of its new energy products has been further enhanced. On August 21st, Liugong Machinery Thailand Co., Ltd. officially opened for business in Ayutthaya Province.

Only by taking advantage of the momentum can one achieve victory. Seizing the opportunity of RCEP, Liugong will continue to enhance the marketing, manufacturing, financial leasing, aftermarket and product adaptability capabilities of its overseas subsidiaries in the future, deepen the global industrial chain and value chain, and forge a more advantageous core competitiveness.

PART03 Voyage: Sailing Deep into the Blue Ocean

Twenty years ago, the slogan "Building an open and international Liugong" was put forward. Liugong took the lead in exploring the international market with an advantage three years earlier than its peers. Today, as domestic brands are competing fiercely and blooming in all their splendor, Liugong's internationalization strategy is being continuously and deeply implemented.

Large-sized and electric products are constantly going global, and new products are actively introduced to the high-end markets in Europe and America. Liugong's path to conquering the blue ocean is advancing steadily and rapidly. Liugong's largest loader, the 8128H, has made its third entry into the Mongolian market, demonstrating its prowess in large open-pit coal mines. At a certain nickel mine production base in Indonesia, the 856E-MAX electric loader has been operating at a high frequency continuously and is highly favored by customers. New products such as the 915FCR, 922F excavator and StageV890H wheel loader were showcased at the European exhibition. At several well-known global construction machinery exhibitions, Liugong heavy Equipment made an appearance, shining brightly throughout the venue... From "going out" to "going in" and then to "going up", from equipment breaking down on the production site to dominating all kinds of extreme working conditions, Liugong has achieved a magnificent transformation in just 20 years.

"Take a chance and turn a bicycle into a motorcycle." This is a phrase often on the lips of people in Liuzhou. Daring to strive and venture is the soul of Liugong and also the mark of its workers. Looking back on its 20 years of overseas expansion, Liugong has been constantly striving. From exporting 120 units of equipment in 2002 to over 16,000 units in 2021, from exporting only loaders to achieving full product line overseas sales, and from 10 people bravely venttering into Casablanca to a global talent team of over 1,800 people, all these achievements have been the result of the hard work and dedication of countless Liugong overseas employees.

The great wind begins at the tip of the green duckweed. Now is the right time to set sail. Although Liugong's internationalization journey has lasted for twenty years, it has only just begun...