Business / Companies

Sany digs deep to lay foundation in Africa

By Li Lianxing (China Daily) Updated: 2014-04-22 07:23

mining machines at a machinery exposition in 2013 in Johannesburg. Provided to China Daily

Machinery producer advocates long-term view for companies on the continent, Li Lianxing reports from Johannesburg

Africa's industrialization and the multitude of infrastructure projects throughout the continent are giving Chinese heavy equipment manufacturer Sany Group Co Ltd huge scope to expand abroad.

However, Xiao Jiang, general manager of subsidiary Sany Southern Africa (Pty) Ltd, said that while Africa has tantalizing potential as a market, any Chinese company contemplating taking advantage of that potential needs to take a long-term view.

The African unit sells machinery used in building roads and mines, dredging harbors and lifting, among other functions. Last year, sales reached $250 million.

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"If all you do is scramble for market share by offering the lowest price and don't care about related services, it's only a matter of time before your operations fold," Xiao said.

"Chinese companies in Africa need to remember that having a solid foundation and a long-term strategy is a must."

Penetrating a foreign market can be tough, particularly in the early stages, Xiao said, and Sany is concentrating on setting up a regional platform to complete the chain locally, so that it has a long-term future in Africa.

"In our industry, selling machinery is a primary-stage activity in a long industry chain. You can't just sell new machinery. You need to offer other services as well, such as spare parts support, after-sales service, maintenance, training, financing, rental and other related services."

Sany Group's domestic and overseas operations are independent of one another. It has 10 offices outside China.

The southern Africa unit is Sany's biggest in Africa, and it operates in 30 countries on the continent. It has five country-specific companies as well.

Zeng Hongbo, marketing director for Sany in South Africa, said its annual sales are more than twice the total for all its Chinese competitors in the country combined.

"Our sales totaled about $70 million last year, while the whole region's were more than $250 million, meaning we have maintained annual growth of more than 40 percent. In 2012, we had explosive growth thanks to mining in Ghana."