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The Legendary Path Behind LiuGong’s Comprehensive Internationalization

2020-04-24 08:47:46   By:CHINA-ASEAN PANORAMA   Hits:

With a history spanning over 60 years, Guangxi LiuGong Group Co., Ltd (hereinafter referred to as “LiuGong”) has grown into an established name in machinery. Started in 1958, LiuGong brought the first modernized wheel loader to southwest China, eventually expanding to an international company that get the thumbs up today. Its legendary path toward comprehensive internationalization is inseparable from generations of willow workers who are open and inclusive, innovative, and bold in thinkings and doings.

LiuGong digging deep in global markets

In 1993, LiuGong began to conduct import and export trade, starting its path toward internationalization. After 10 years’ exploration, LiuGong has continuously accumulated strengths and further optimized its overseas strategy, embarking on a global path. 

“LiuGong has gone through the complete process of development and operation of a mature international enterprise, including trade, marketing, overseas manufacturing, overseas mergers and acquisitions, and strategic alliances. From 2003 to 2008, LiuGong gradually established a marketing network overseas; LiuGong opened its first overseas plant in India in 2009; In 2011, LiuGong successfully acquired the construction machinery sector and its wholly-owned subsidiary of a polish enterprise. Then, in 2012, LiuGong and Cummins Inc formed the joint venture Guangxi Cummins Industrial Power Co., Ltd,” said Luo Guobing, deputy president of Guangxi LiuGong Machinery Co., Ltd.

It is worth mentioning that LiuGong’s first overseas production base was officially put into operation in India in 2009, which is of great significance for LiuGong’s course of internationalization. This marks that LiuGong’s globalization is shifting from the internationalization of the sales market to the localization of the manufacturing base, which enables LiuGong to better adapt to the overseas market and enhances the local customers' confidence in Chinese products to a greater extent. 

From then on, LiuGong has continued to exploit its overseas manufacturing and research and development bases. According to Luo, LiuGong acquired Polish HSW Company in 2011 and established a manufacturing base in Europe. At present, LiuGong owns three overseas manufacturing bases in Poland, India and Brazil, five R&D bases in China, India, Poland, the U.S. and the U.K. and 13 overseas subsidiaries. 

After over 10 years of effort, LiuGong has become a symbol in the construction and machinery industry by developing from a purely self-run export & trade model to a multinational model, with more than 300 overseas agents covering more than 130 countries and regions.

Pioneering and thriving in Asia-Pacific markets

Today, LiuGong has established strategic relations with seven countries, covering 20 core markets in the world. Among them, its performance in Asia-Pacific markets is eye-catching. “In 2011, LiuGong Asia Pacific was founded and headquartered in Singapore. In 2019, LiuGong set up a marketing company and a manufacturing company in Indonesia,” said Luo. 

Speaking of the significance of the Asia-Pacific markets, especially the ASEAN market, Luo frankly said, “LiuGong has an excellence performance in the ASEAN market. It can be said that ASEAN market enjoys the strategic position of LiuGong’s overseas layout.

“The overall competitiveness of our loaders is very strong in the Asia-Pacific market. Among top 10 countries of export trade of LiuGong’s loaders, ASEAN countries accounted for five, and our sales are ranking first in most of the ASEAN countries. In addition, excavators are also our typical core products, enjoying a popular market. 

“However, LiuGong’s overseas markets encountered challenges such as language communication, cultural differences, tariff and non-tariff barriers, especially the initial distrust in LiuGong’s brand in the early stage.” 

Luo indicated that win-win cooperation is the principle adhered by LiuGong when it explored global markets. LiuGong’s internationalization strategy not only can increase employment for the local, increase tax revenue for the government, but also attach great importance to the cultivation of local talents. “For example, we organized the Seminar on Lao Road Construction Technology and Development in Laos to help the local develop its transport infrastructure by utilizing LiuGong’s superior resources. It is the idea of win-win cooperation that helps LiuGong overcome difficulties on the way, and gradually win the favor of the market.

Comprehensive intellectualization driving upgrade and development

On September 4, 2019, LiuGong’s 5G-based remote intelligent shovel loader successfully debuted at the 15th China Beijing International Construction Machinery. The loader, remotely operated in Beijing, can receive the 5G signal and complete a series of actions in Guangxi’s Liuzhou, 2,000 km away from Beijing. 

The appliance of LiuGong’s intelligent products, will liberate people from mines, quarries and other harsh working environments, which makes the operation safer, and personnel management more convenient. LiuGong’s chief engineer and dean of Research Institute Lin Mingzhi said, “Comprehensive intellectualization, one of our core strategic measures in the future, mainly includes product intellectualization, manufacturing intellectualization and service intellectualization, which will allow LiuGong to compete head-on with world’s leading enterprises with high-tech and high value-added products.

The intellectualization of products can intuitively allow customers to have using experience, further improve communication efficiency and enhance customer trust. According to Luo and Lin, the CLG856H loader, improved by LiuGong according to the sufficient research on working conditions, customers and the operation of the rice factory, is widely popular in Thailand. 

The advance of LiuGong’s comprehensive intellectualization is extraordinary, which has gained a market reputation. In 2013, LiuGong’s Global Research and Development Center (GRDC) was formally approved. On June 18, 2015, it was formally completed and the National Earthmoving Machine Engineering Technology Research Center was officially established. Zeng Guang’an, Secretary of the Party Committee and Chairman of LiuGong once expressed that the establishment of GRDC is not only related to the future core competitiveness of enterprises, but also to the development of the construction and machinery industry. In this sense, there was no hesitation for LiuGong to construct and invest the GRDC. 

 

No pains, no gains. From industry 1.0 to industry 4.0, each era is a manifestation of people’s intelligence. The upgrade of manufacturing industry is also shifted from traditional manufacturing to intelligent manufacturing. It is believed that LiuGong, along with the advance of comprehensive intellectualization, will yield a more rosy future.

 

Source: China-ASEAN Panorama

 



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