Weichai Group "secondary innovation": force high-end hydraulic

In the next five to eight years, with hydraulic system manufacturing as the core, it will achieve a production value of 50 billion yuan and re-create a Weichai Group. Recently, Xu Hong, party secretary and deputy general manager of Weichai Holding Group Co., Ltd. (hereinafter referred to as the Weichai Group), said in an interview with reporters that one of the directions of the group's “second venture” is to develop high-end hydraulic parts in order to break the This area mainly depends on the pattern of imports.

bottleneck

"In the construction machinery industry, hydraulics are the ones that get the world." Xu Hong made this metaphor for the importance of the hydraulic market.

It is understood that the hydraulic control system is one of the "bottleneck" restricting the development of China's equipment manufacturing industry. The global hydraulic system has long been monopolized by Germany's Bosch Rexroth, the United States Eaton Corporation, and Japan's Kawasaki Corporation. In the “Twelfth Five-Year Plan” of the high-end equipment manufacturing industry, the state also explicitly proposed to focus on the development of hydraulic products.

The hydraulic system is related to the quality and safety of construction machinery. Xu Hong gave an example. A 50-meter-tall ladder fire truck relies on hydraulic pressure for its telescopic support. If the hydraulic pressure is unstable or pressure relief is likely to break, it will threaten life safety.

Due to its importance, the proportion of hydraulic control systems in the cost of construction machinery is not low. “As an example of an excavator, hydraulic control systems account for about 25% of the total cost of the machine.” Liu Deyong, deputy chief engineer of Mountain Rehabilitation Co., Ltd., told the reporter that most of the components of the hydraulic system are based on excavators produced by mountain reconstruction machines. Reliance on imports, the proportion of more than 80%, while the main components of the hydraulic system, the main pump, valves, etc., or even all imports.

Xin Renzhou, deputy director of the Industrial Policy Department of the Ministry of Industry and Information Technology, recently stated that China’s high-end equipment manufacturing industry still depends on foreign countries to a certain extent, and some industries appear to be bustling. In fact, most of the profits are given to foreign manufacturers. The Ministry of Industry and Information Technology released the “Twelfth Five-Year Development Plan for Machinery Basics, Basic Manufacturing Processes and Basic Materials Industry” to clearly state the development of hydraulic components. Its sales are expected to increase from RMB 35.1 billion in 2010 to RMB 70 billion in 2015.

Change

It is precisely this market that has been identified, Weichai Group has long had plans for this. In September 2012, Weichai Power Co., Ltd. (stock code 000338, referred to as “Weichai Power”, a subsidiary of Weichai Group) and the German KION Group (hereinafter referred to as “KION”) signed a strategic cooperation agreement. According to the agreement, Weichai Power will invest KRW 738 million in the acquisition of KION, of which 271 million euros will be used to purchase 70% of KION's Linde hydraulic business.

It is understood that Linde hydraulic drive technology in a global leader. At present, Linde Hydraulics is an important supplier of world-class industrial equipment manufacturing groups such as Caterpillar, Volvo, and Liebherr.

The strategic cooperation with KION in the view of Tan Xuguang, chairman of Weichai Power, will help Weichai Power quickly grasp the world's leading high-end hydraulic technology, and thus will change the global hydraulic manufacturing pattern. In fact, as early as 2010, Weichai Power purchased a hydraulic part factory in Qingzhou City and began to lay out the hydraulic market.

Zhang Donghai, Party branch secretary of the Weichai Group's technical center, told the reporter that the introduction of Linde Hydraulics will promote the domestic construction machinery manufacturing technology on the basis of current progress for 10-20 years.

On June 29, 2013, KION was listed on the Frankfurt Stock Exchange. With the exercise of the KION Call Option, Weichai Power further increased its stake in KION to reach 30% of its total share capital after listing. According to Zhang Zhengqiang, director of Policy Research Office of Shandong Heavy Industry Group Co., Ltd. (Weichai Group's parent company), follow-up cooperation with the KION Group, including hydraulics, will continue.

The opportunities in the domestic high-end hydraulic market have given the industry more hope for the second venture of Weichai Group in the current context. The goal is to achieve sales revenue of RMB 200 billion by 2020, sprinting at the Fortune 500. ,