Chinese makers' mixed feelings

China's machine tool manufacturers have mixed feelings amid fierce competition from overseas and faltering demand.

On a global scale, the country has taken the top seat in terms of both sales and production of machine tools for 10 years consecutively.

However, as a barometer of manufacturing activity, its market value dropped 37 percent in the first eight months of 2012, according to data from the China Machinery Industry Federation.

As a result, many Chinese companies have seen declines in the number of new orders.

"Our business is more or less affected by the ongoing recession, which is most evident in the country's sales," said Li Ji, general manager of the European branch of Jiangsu Yangli Group Co, a leading domestic manufacturer in mechanical and high speed plate processing machinery.

To offset the saturated growth at home, Yangli has rolled out an ambitious plan to expand to overseas markets. In Yangli's strategic layout, emerging economies such as South America and Russia will be well explored because business there is still at a fledgling stage. The company's European operation is aimed at enhancing quality and taste.

Despite the difficult times the industry has had to face in recent years, companies have appeared a lot more "confident and optimistic", especially some Chinese companies, said Susanne Neuner, public relations director of Mack Brooks Exhibitions Ltd, an agency that facilitated the 2012 International Sheet Metal Working Technology Exhibition (EuroBLENCH 2012).

As an industry barometer, this year's show attracted 1,520 exhibitors from 39 countries, with a record of 61 Chinese companies participating in the event.

"Many exhibitors at EuroBLENCH have increased their stand space and showcase an enormous variety of new products and innovations. A growing number of Chinese companies have more extravagant stands than before," she said.

Jinan-based Jier Machine Tool Group Co is one such example. As a world-renowned mechanical press maker, Jier won an order from Detroit-based Ford Motor Co for five large-scale automatic press production lines at two of its factories in late 2011, said chairman Zhang Zhigang.

The order is the single largest export order that Chinese machine tool producers have ever received. It is also the first time in nearly 20 years that Ford purchased complete sets of press equipment from a country other than Germany, he said.

"Even hit by the global recession, we managed to see moderate growth this year at home and abroad. Where we outperform our competitors is in quality," he said. The company is ranked among the top three press makers worldwide.

Jier is steadily expanding its footprint in South America, India and Russia but Zhang said there is no need to rush.

"The machine tool industry represents a country's core manufacturing competence. Expanding at too fast a speed is likely to water down the company's core competence," he said.

"That, in turn, would put companies in a vulnerable state should a crisis occur."

hewei@chinadaily.com.cn