India is a vital market for Shantui and Indian customers are intelligent and always keen to buy quality products at competitive prices. Keeping these factors in mind, we are setting up our own manufacturing unit in India by the end of this year or early next year to supply products matching local requirements. Initially, the company will promote its bulldozers and then other road construction equipment including road compactors, motor graders and other concrete equipment. Eventually, we will bring our complete product range to the Indian market as its infrastructure sector holds huge potential in the immediate future, said Mr. Li Dianhe, Vice President, Shantui in an interview with S.K Rizvi.
Would you please share your views with our readers about Shantui's global operations, its manufacturing facilities, their locations, product range and important business areas?
Shantui Construction Machinery Company was founded in 1980 with its headquarters in Jining in Shandong Province, China. Originally it was a fully state-owned entity, but now Shantui is a robust public company and is currently on its way to become one of China's top global brands with sales spanning more than 120 countries.
In China, Shantui is synonymous with the word "bulldozer" and the equipment holds a 65% market share in this top of the line product in the country. Today, Shantui is not only the world's largest producer and distributor of dozers, but also offers a highly diversified range of construction machinery from wheel loaders and excavators to graders, rollers, pipe layers, cement trucks, forklifts and more.
Aside from this, the company is in a dominant position in China in the production of parts for all types of construction machinery and leads in the production of tracks, arms, cabs, undercarriages and scores of other spare parts for bulldozers, excavators and other machines. So much so that many of our Chinese competitors rely on us for parts, as do several foreign brands.
Please tell us in detail about Shantui's JV and R&D Centre.
About 15 years ago, Shantui forged a partnership with Japan's Komatsu Corporation, a leading manufacturer of excavators in the world. The Komatsu-Shantui Company produces Komatsu-branded excavators in Jining, and Shantui has learnt much about production management and technical processes. The venture is still going strong with Shantui's share of the business standing at 30%. Today, Shantui employees, including mid to higher level managers, often get training at the Komatsu-Shantui plant before taking over Shantui's operations.
Shantui has a world class R&D Center where researchers design everything from new operator ergonomics to more efficient blades and tracks for bulldozers. In addition, our engineers are working relentlessly on the next-generation engines to meet fuel efficiency and emission control norms meeting the most stringent market requirements around the globe. Our R&D centre and post-doctoral scientific research lab are second to none in the construction machinery industry in China.
Is your product price competitive without losing productivity and efficiency of your machines?
Shantui has accurately positioned itself as China's Value Leader. We are now fully applying our years of experience with Komatsu and our own experience as the leader in the development of the bulldozer, where we have more than three decades manufacturing experience. Apart from providing productive and efficient equipment, our pricing overall is also very competitive. As a result of our production prowess, we are able to consistently bring Good Value to our Customers. In sum, no one else offers the unique balance between high performance and great price that Shantui delivers. That's why we adopted the new corporate tagline, "Value That Works."
Which products are you planning to promote in the Indian market?
India is a developing country and its GDP growth is also very high. First, we have planned to promote our bulldozers and later on other road construction machinery such as road compactors, motor graders, and concrete machinery. Over a period of time, we would bring our complete product range to the Indian market to support your burgeoning infrastructural development, just as we did in China.
The Indian market is really very interesting and important for us. The customers here are very intelligent and want quality machines with the best price available in the market. In view of this, we are keen to set up our own manufacturing unit in the country by the end of this year or early next year to roll out a range of products to meet local requirements.
India is a vast market for construction equipment of heterogeneous nature and applications, what are your plans to have nation-wide network of dealers and distributors?
Our focus is to achieve success in India the way we have done in China. In India, our target is to establish a good sales and service network across the country. Therefore, we plan to have at least one dealer in every state for which our group has set up a local company to manage its dealership network. For the distant future, our target is to engage 5 to 10 dealers every year so as to cover the whole gamut of the construction equipment market.
Earlier we used to do our business through a sole agent but we have changed our strategy for big markets such as Russia, Brazil, and India where one dealer can't cover the whole market. In India, we have been selling our products since 2004 through our dealer, Dozco. Although we are very satisfied with their performance, now we are looking to broaden our dealership network to achieve our growth targets. We have 32 dealers in China, 8 dealers in Russia, 2 in Brazil, and have 60 dealers in 120 countries overall.
Today, customers are more concerned about after sales support services and availability of spare parts. Please elaborate on your plans to have an effective pan India support system.
Shantui's after-sales services, parts distribution and delivery expertise match global standards, further strengthening Shantui's rise as a leading multinational brand. Integral to our global network is our longstanding promise to provide our hallmark "Anytime, Anywhere Service." Shantui dealers and sales agents are technically trained, experienced and devoted to delivering the best service to our customers across the globe.
For India, we have a very specific plan to win over our local customers with the help of our trained dealers. We are considering setting up 3-4 spare parts centers in India to cover the whole market so as to provide excellent service support to our customers. Since we have learnt a lot from our partnership with Komatsu, our service professionals also carry the company's values with them wherever they are called upon for assisting customers.
With emerging opportunities in the CE industry—how do you view the growth of your company in the next three to four years including your expansion plans and having an assembly line in India?
Our target is to make Shantui India a 100% local company to give direct support to our local customers. At the same time, we are also planning to roll out our product line from Indian operations in the next 2 years. We have great expectations in this market and look at the country as being second only to our domestic market in China in importance to us.
What was the focus of Shantui's participation in Conexpo-CON/AGG 2011 and also tell us about the new product or services unveiled at the show? Will the new product be available for the world market or are they meant only for American market?
"Conexpo was a wonderful platform to promote Shantui globally." This time we displayed our SD10YE bulldozer, our first product launched in the U.S. market. The SD10YE is certified by TÜV SÜD America as Tier III emissions compliant, runs on hydrostatics, comes standard with a Cummins engine and has horsepower rated at 100, or 74kW.
Like other Shantui offerings, the dozer packs in value for the price. Intelligent GPS service, automatic alarm system and auto-diagnostic functions keep uptime at a maximum. The SD10YE also doesn't skimp on operator comfort. The fully enclosed hexahedron–style cabin provides for low noise and vibration, and a high-capacity climate control system circulates air and defrosts.
The equipment meets the North American standards, and our main purpose of participation at Conexpo was to introduce the new machine in this market. After Conexpo, this machine will be delivered to South American markets such as Venezuela and Brazil. We have a branch office of our parent company in Brazil, which is growing very fast due to lots of construction activities taking place in preparation for the 2014 World Cup and the 2016 Olympics.
In addition to the SD10YE dozer, Shantui also displayed its workhorse SD32W bulldozer, SL60W wheel loader, SR12P-5 road roller, SG18-3 motor grader, JCM 921C excavator, HJC5270THB truck mounted boom concrete pump and the HBT8016R concrete trailer pump at the show. We were demonstrating our product line diversity, which is another of our main selling points.