A Snapshot of Sany Heavy Industry

Sany Heavy Industry exemplifies many Chinese corporates – relatively anonymous, yet a massive global presence in a sector (6th largest firm in the world) that China is reknowned for its strength in. The Changsha based venture focuses on the production and export of concrete machinery, cranes, excavation equipment and wind turbines

The company started small in the 1980s and rapidly expanded, listing on the Shanghai exchange in 2003. Since then it has gone global very quickly operating in over 100 countries, however these bold moves along with a slowing Chinese economy have damaged the firm’s bottom line and it has run into difficulties over the last few years seeing its revenues fall dramatically from CNY 49 billion 2011 to CNY 29 billion in 2014.

LIke many Chinese engineering firms it has dipped into European markets, including a joint venture with Austrian Palfinger and takeovers of the German firm Putzmeister and Italian Compagnia. These moves have helped develop the firm’s expertise make it the global force it is today. Sany’s major competitors include US based Caterpillar and from a local perspective Sichuan Tangoing Heavy Industrial Machinery.

In a bold and perhaps unexpected move Sany will soon expand into the smartphone production market as a way of diversifying away from heavy machinery. Smartphones are of course a massively expanding market, for example Africa is experiencing 22% year on year growth in internet use, much of this will be on smartphones and there are expected to be 412 million smartphone users on the continent by 2018. However other Chinese firms like Qihoo 360 Technology and Gree Electric Appliances are also moving into this market, so it will not necessarily be the money spinner they hope it will be. Sany has also moved into port machinery putting it into competition with Zhenhua Heavy Industry which currently dominates the sector.

Sany is clearly facing a identity crisis – facing declines in revenue at home and tough competition abroad it is trying move away from its unglamorous roots into new sectors, whether this will pay off remains to be seen.

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