Wang Min, Chairman of XCMG, describes the challenge, the next step to find new global growth

Oct. 21 from CHINANEWS at the China Hotel in Beijing:
On October 19 XCMG, China's largest construction machinery industry company, won another accolade, XCMG ranked 7th in the newly released "global Top 50 construction machinery manufacturers list", and ranked first in Chinese enterprises, they continue to be an industry model.
During the conference, a reporter from the Finance Center of China News exclusively interviewed Wang Min, chairman of XCMG. As an experienced worker influential to XCMG’s growth, leading XCMG, and making XCMG bigger and stronger, Wang Min led 18,000 workers to create today’s XCMG, and plan tomorrow’s XCMG with the goals of: "100 billion revenue, international growth, and world-class products".
To investigate the history and present of an enterprise, we should look at the leader during the enterprise’s growth. Wang Min started working in the factory at 18 years old, and in nearly 40 years transformed XCMG from a small little-known local state-owned enterprise in Xuzhou, Jiangsu to a world-class engineering machinery enterprise, and transformed XCMG from an arsenal in the liberated area in 1943 to a model of Chinese enterprises through rebirth, rebuilding, and brilliant achievements during 22 years.

When looking back at the ups and downs of XCMG, Wang Min just smiled and went on, he said "he would write a book to talk about this in detail after retirement", now he needs to focus on "looking to the future." He is more willing to talk about business, and the industry. He comes from an industrial point of view and strives in a large competitive environment with internationalization and globalization. He wants to talk about how to take responsibility of factors such as customers first, bigger and stronger corporate structure, leading the industry in industrial innovation, as well as encouraging Chinese enterprises to "go out" to win global competition.

Homogeneous competition wins in "Customers First".

China News: First of all, congratulations on the excellent results of XCMG ranking 7th in the world. XCMG has ranked 1st in China's construction machinery industry for continuous 22 years, how about the performance of XCMG in the industry in recent years? What important key concepts and core values are highlighted by XCMG performance?
Wang Min: XCMG ranked 7th on the list of 2011 global top 50 construction machinery manufacturers, leading Chinese enterprises and realizing the best ever results since Chinese enterprises appeared on the list. We are not only happy about this, but also feel heavy responsibilities for this, XCMG has also demonstrated its world-class "style" in its own strength areas, XCMG ranks 2nd on the global Top 10 crane manufacturers list. Sales volume of truck cranes and large tonnage rollers continue to be the highest in the world. The sales volume of 12 types of hosts and parts continuously ranked 1st in China. In the newly released list of top 500 Chinese enterprises, XCMG ranks 123rd, leading the industry.
XCMG’s growth has benefited from China's rapid economic growth and global industrial development history. The most direct and micro level reason for XCMG success is keeping integrity, pursuit of customer value, product innovation, user-driven technological innovation, and value innovative ideas as its core values. In the future, XCMG will continue to promote its core values of quality, integrity, and customer value.

Innovative service models combining central government-owned enterprises and banking enterprises.

China News: We have noticed that XCMG had recently signed "strategic cooperation agreements" with central government-owned enterprises and financial institutions such as China Nuclear Construction, China Minmetals and China Industrial and Commercial Bank, how will this help the development of XCMG?
Wang Min: Currently, XCMG is striving to achieve the business objective of "100 billion revenue, international growth, and world-class products" at full speed. The partners, China Nuclear Construction and China Minmetals will become an important support for XCMG’s rise. Take China Nuclear Construction as an example, they are the pioneers in the Chinese nuclear construction industry and have already assumed, not only key national projects, but also large overseas projects, with high visibility in the industry. Under the agreements, both parties will carry out extensive cooperation in areas such as domestic and international projects construction, nuclear power engineering construction machinery and equipment R&D, co-investment and customer service. To realize leapfrog development in their respective areas, the companies will establish comprehensive strategic partnership relationships, and realize powerful alliances, with an objective of mutual gain.
In addition, in recent years, while building a comprehensive leasing, asset management, and corporate finance platform XCMG is stepping up the establishment of finance companies. XCMG actively promotes wider, broader and deeper business cooperation with banking enterprises through cooperation in all aspects such as credit financing, supply chain products, personal finance, finance companies, cash management, corporate annuity, international settlement, treasury operations, investment banking, insurance and "going out" business.
Currently, XCMG has signed "chief to chief" level strategic cooperation agreements with China Everbright Bank, China Industrial and Commercial Bank, Bank of China and Shanghai Pudong Development Bank. These "bank-enterprise cooperation" will provide customers with "one-stop business" with great convenience, also provide lower financing costs and more efficient "capital leverage" for the development of customers projects and XCMG. While achieving "customer-XCMG-Bank" Tri-win, it also accelerates the growth of the financial services sector and modern services of XCMG.

Breaking the global power of foreign companies depends on innovation.

China News: XCMG frequently has made huge strides, especially in independent innovation. How do you comment on XCMG’s performance in this important area?
Wang Min: As the industry leader, XCMG has always had the core value of customer value, enriching and creating the customers’ value in multiple steps and levels, such as product technology, manufacturing processes and technology service capabilities. With being ahead to the summit of global construction machinery technology as an innovation objective, XCMG convenes the most high-end mechanical engineering and technical personnel in China. Relying on a strong R&D strength and years of dynamic investment and painstaking accumulation, the R&D results of XCMG are entering an important harvest period.
In the first half of this year, XCMG has been authorized 262 patents, including 9 invention patents, more than the amount in 2010. "Iron Spider-Man" step walking style mountain excavator was awarded the National Science and Technology Progress Second Prize. The 1,200-ton full ground crane, 2,000-ton crawler crane and 12-ton loaders have passed appraisal and began to sell, breaking the dominance of foreign enterprises worldwide, having fundamental influence and effectiveness in the industry and playing an important role in the national key projects. In the development of the core components, XCMG has independently broken through with the innovation of high-end hydraulic cylinders and new gearbox, breaking the bottleneck in rotary bearing, drive axle and engine through multi-national joint ventures with Germany, the United States and South Korea through joint and collaborative innovation. It also accelerates breakthrough in the core technologies of pumps, valves, motors and other hydraulic components.

This year, XCMG has been authorized to be the exclusive in the first group of Chinese technology innovation demonstration enterprises in Jiangsu by two Chinese ministries.

Taking up high level of technology with global distribution of R&D centers

China News: Recently, the XCMG Nanjing Research Institute has inaugurated. Over the years, as the most important innovation body in China's construction machinery industry, the contribution of XCMG to technological innovation in the industry is widely acknowledged. As the cradle of technological innovation, the Research Institute has played an important role in the development process of XCMG. How would you evaluate the XCMG innovation system of the Research Institute?
Wang Min: XCMG will continue to increase independent innovation, and accelerate the establishment of all domestic and foreign R&D platforms. The global layout of the R&D centers is the important strategic direction of XCMG during the "twelfth five-year-plan". Jiangsu Xuzhou Construction Machinery Research Institute, with total investment of one billion RMB, is in construction, which will generate a large international R&D platform with dynamic and innovative global influences. Base on two companies with acquisition from Europe, XCMG is stepping up the construction of XCMG European Research Institute. XCMG factories and engineering centers in Brazil, with total investment of 200 million USD, are stepping up the construction. While establishing XCMG Nanjing Research Institute, Shanghai port exporting manufacturing base and XCMG Shanghai Institute will also be under construction.
These new platforms will promote XCMG to speed up gathering global technology resources and high-end talents at home and abroad, injecting new impetus in achieving objective to reach the world's top technology summit of the industry, speeding up mastering more core technologies, and always firmly occupying the technology commanding heights of the domestic industry. XCMG will depend on the follow-up policy support for national technology innovation demonstration enterprises, actively carrying out the works of technological innovation demonstration enterprise according to the dynamic management requirements for national technology innovation demonstration enterprise, implementing technical innovation, and providing a strong scientific and technological support for XCMG development objective in the "Twelfth Five-Year-Plan".

Innovation management establishes information-procurement platform for XCMG.

China News: Informationization establishment has always been people’s focus. The start up of the first truly information-procurement platform in the industry marks that XCMG leads the information construction in the industry, what valuable work experience does XCMG gain on informationization establishment? What management innovation breakthroughs have been achieved by XCMG?
Wang Min: XCMG’s construction of information-procurement platform involves a wide range and large difficulty coefficient, its successful start-up depends on a lot of efforts from all project team members, it also reflects that XCMG has cultivated a combined management personnel team not only understanding the business, but also information through informationization establishment. "XCMG informationization overall enhancing project" is an innovation project, a basic management project bearing XCMG’s future development, achieving strategic transformation of the group. XCMG expects high of this management project. According to the planning principles of group informationization "vertical platform, horizontal integration, collaborative operation, and intelligent analysis", which will ultimately achieve operations at corporate headquarters, marketing center, and dealers three levels, and create a comprehensive value community of XCMG.

In recent years, in management innovations and breakthroughs, XCMG also achieves coming into market after reconstruction, raising fund of 5 billion RMB in A share market, launching the H-share issuance plan, rebuilding the brand, resources, product lines advantages and capital market appeal and speeding up improvement of XCMG’s capability and international pace. By the control shift and refining management, it promotes integration of personnel, finances, production, supply and marketing, mechanisms, and systems centralized procurement of bulk materials and overall enhancement of informationalization, highlighting the whole value chain competitive advantage and effectiveness and efficiency advantages. Profits and taxes at the end of the "Eleventh Five-Year-Plan" are over quadruple and triple than those at the end of the "Tenth Five-Year-Plan", respectively.

Leading the industry internationalization, taking up the forefront of some national markets

China News: This year, XCMG has signed the largest export order in China’s construction machinery history. Implementation of internationalization strategy is the focus of XCMG’s development in recent years, how about the current internationalization process of XCMG?
Wang Min: XCMG implements a positive, safe, three-step globalization strategy, forming a global network of more than 100 sales and service agents, distributing their products to 147 countries and regions in the world, cumulatively achieving export valued 2.6 billion USD in the "Eleventh Five-Year-Plan", increasing by 9.1 times compared with that in the "Tenth Five-Year-Plan", with export earnings and gross exports of five main hosts continuing to rank 1st among the industry.
Particularly in March this year, XCMG high-level delegation visited Bolivarian Republic of Venezuela, whose President, Chavez, has met with them in person. After several rounds of negotiations with Venezuela's oil company, XCMG eventually signed the largest export order of China’s construction machinery with the full range and complete construction machinery products advantages, excellent brand image and reliable product quality, as well as powerful and industry leading manufacturing and service support capabilities. In this project, XCMG has exported a total of 6,025 units of construction machinery equipment to Bolivarian Republic of Venezuela. In the aspect of a single order, both the order amount and the number of equipment have been the first in the export of China’s construction machinery and global construction machinery market, but also the first Chinese large-scale manufacturing groups independently undertaking and carrying out exports of sets of construction machinery.
XCMG internationalization is undergoing increasing higher speed, more intensive and wider, achieving a market-leading in some developing countries. Exports amount in the Brazilian market in 2010 exceeded 130 million USD, share of truck crane accounts for 46%. In the Polish market, loaders share reached 70%. Overall share in Kazakhstan ranks 1st, and the Top 3 in Australia and Russia.

Finds new growth in western development and enters into Xinjiang market.

China News: On August 4, XCMG has signed an investment agreement on XCMG Xinjiang equipment manufacturing base project with Urumqi Economic Development Zone, representing the official implementation stage of XCMG Industrial Park, how do you think of Xinjiang and Central Asian markets? What is the significance of the project to development strategy of XCMG?
Wang Min: Xinjiang market is an emerging promising market in recent years. In particular, as the resource base and the bridgehead opening to west developed greatly by central government in recent years, Xinjiang will initiate a new round of rapid development of China's construction machinery market. XCMG seizes the favorable opportunity of reasonable investment cost, focusing incentives policies, to timely develop equipment manufacturing base in Xinjiang. The project is located adjacent to Urumqi DiWoBao international airport, Western Railway Station and ukwi highway, covering an area of 1300 acres with a total investment of 2.5 billion RMB. It mainly produces earthwork machinery, concrete machinery, construction machinery and other products. The annual output value is expected to reach 6 billion RMB. The project will become the R&D, manufacturing, sales and export center of construction machinery products of XCMG radiating northwest provinces and the Central Asian countries, and with this as a platform to expand it to a new industry area with broad market prospects combining the special geographical and resources advantages of Xinjiang at an appropriate opportunity. The project has potential and far-reaching strategic significance to XCMG in completing layout system of its global manufacturing bases, deepening regional markets and strengthening the brand image of XCMG.

Global production base layout from China to the world by "connecting the dots into a line"

China News: What are the considerations of XCMG on the overall layout of bases domestically and globally?

Wang Min: To speed up a new round of major breakthroughs in all the plates of XCMG, the layout orienting the whole nation and world is accelerating. XCMG currently possesses 19 major projects under construction, with a total investment of over 20 billion RMB on major construction projects in the "Twelfth Five-Year-Plan". Among them, the large tonnage crane base proceeds smoothly, loaders and concrete machinery bases concentrate started, the Brazilian base, Shanghai port base, excavator base, heavy truck base and Xinjiang base construction will start, Indonesia base, South Africa base, Eastern Europe base and Indian base are in research process, which will be implemented as soon as possible.
Jiangsu Xuzhou Construction Machinery Research Institute construction accelerated, Nanjing Research Institute inaugurated, joint venture with South Korea's Doosan engine is completed, and construction of European Research Institute with two hydraulic component system development companies merged in Europe also speeded up. The implementation of global flagship store, one thousand 4S stores nationwide and 25 international customer service system construction projects are undergoing higher pace. XCMG global manufacturing base, R&D centers and marketing network layout is increasingly clear, with this as a new and important driving force, the expansion and promotion of XCMG in the domestic and global market is also "connected from the dots into a line", releasing greater vitality and competitiveness.

Remain optimistic about China's economic growth in the long term and find new point of growth in the world

China News: Since the second quarter of this year, some product sales in the national construction machinery market declined, and the industry growth rate dropped as well, the industry "inflection point" remarks have appeared. In the current relatively bleak situation for the industry as a whole, how does XCMG understand and treat the "Twelfth Five-Year-Plan", and how to realize "100 billion, international, and world-class" development objective in the "Twelfth Five-Year-Plan"?
Wang Min: Construction machinery industry is with strong correlation with economic cycle and the national investment policies, just as such, although the current development of the industry is facing great challenges, we have very firm confidence that China’s construction machinery still has good growth prospects in the "Twelfth Five-Year-Plan" in terms of long-term good development of China's economic fundamentals, China's urbanization rate gap with the developed counties and the huge demand in water conservancy construction, indemnificatory apartment construction and other infrastructure construction, as well as the process of Chinese enterprises speeding up going out and internationalization.
XCMG should take the valuable opportunity of the "Twelfth Five-Year-Plan" to continuously transform and reach breakthrough, ranking 1st in the industry eternally. During the "Twelfth Five-Year-Plan", XCMG will expand products and capital markets, facing towards the world, broaden and enhance construction machinery, heavy truck host product and core components areas, facing customers and enter into the high-end equipment manufacturing, facing the future. It strives to achieve operating income of over 100 billion RMB next year, and achieves operating income of 300 billion RMB by 2015, ranking top 3 in global construction machinery manufacturers.
To achieve the "Twelfth Five-Year-Plan" strategic objectives, XCMG will work around a center, that is, change and adjustment, optimization and upgrading, fully implement the organization and management transformation and innovation project. According to the arrangements and deployment of Xuzhou city Party committee and city government, it will speed up new equity incentives mechanism for management and technical backbone, employers, salaries and incentives methods innovatively driving all employees aiming at target of 300 billion, injecting new vitality and power into a new round of development of XCMG. Around four businesses and four processes, changing operating mode, management and control mode as well as business mode, adjusting the industrial structure, product structure, technology and organizational structure, gathering high-end talent domestically and internationally with an open, inclusive, innovative, hard working corporate culture of XCMG, forming system processes and resources capacity adapting to the scale of 300 billion and global top 500 strategic, laying a solid foundation for full breakthrough in scale, strength, products, markets and plates of XCMG. XCMG will achieve two breakthroughs, on the one hand, unifying and integrating the overall operation of construction machinery listed companies to achieve the rapid development and continuous double objective in the "Twelfth Five-Year-Plan". On the other hand, it will achieve integration of "heavy truck and special vehicle", and create a competitive heavy truck and special vehicle plate. XCMG will also improve three abilities. First, enhance the development capability in the core plate, especially earthwork machinery, concrete machinery resources integration and growth double. Secondly, advance competitive capability in fast internationalization, especially winning share from the strongest opponents globally. The third is to enhance the innovation capability in operation of large-scale capital and global mergers and acquisitions as well as successful integration.
In the future, XCMG will further accelerate the upgrading and restructuring for the "modern, service-oriented manufacturing enterprise", actively attracting more and more leading concepts and modes, upgrade the management operating system. Meanwhile, XCMG will further progress the construction of technical system with Xuzhou Construction Machinery Research Institute, Jiangsu and the National Technology Center as the main body in the next few years,. XCMG will achieve a breakthrough firstly in the core and manufacturing technology, such as intelligent, lightweight, energy-saving and environmental protection and self-development capacity in high-end products, focusing on improving R&D capabilities for core components and the application level of intelligent automatic control technology and moving in full power towards the summit of global construction machinery technology. We will also speed up the internationalization process, achieve the transformation "from China to the world and complete industry ambitions and dreams of "forward the world from the east".
Oct. 21 from CHINANEWS at the China Hotel in Beijing:
On October 19 XCMG, China's largest construction machinery industry company, won another accolade, XCMG ranked 7th in the newly released "global Top 50 construction machinery manufacturers list", and ranked first in Chinese enterprises, they continue to be an industry model.
During the conference, a reporter from the Finance Center of China News exclusively interviewed Wang Min, chairman of XCMG. As an experienced worker influential to XCMG’s growth, leading XCMG, and making XCMG bigger and stronger, Wang Min led 18,000 workers to create today’s XCMG, and plan tomorrow’s XCMG with the goals of: "100 billion revenue, international growth, and world-class products".
To investigate the history and present of an enterprise, we should look at the leader during the enterprise’s growth. Wang Min started working in the factory at 18 years old, and in nearly 40 years transformed XCMG from a small little-known local state-owned enterprise in Xuzhou, Jiangsu to a world-class engineering machinery enterprise, and transformed XCMG from an arsenal in the liberated area in 1943 to a model of Chinese enterprises through rebirth, rebuilding, and brilliant achievements during 22 years.

When looking back at the ups and downs of XCMG, Wang Min just smiled and went on, he said "he would write a book to talk about this in detail after retirement", now he needs to focus on "looking to the future." He is more willing to talk about business, and the industry. He comes from an industrial point of view and strives in a large competitive environment with internationalization and globalization. He wants to talk about how to take responsibility of factors such as customers first, bigger and stronger corporate structure, leading the industry in industrial innovation, as well as encouraging Chinese enterprises to "go out" to win global competition.

Homogeneous competition wins in "Customers First".

China News: First of all, congratulations on the excellent results of XCMG ranking 7th in the world. XCMG has ranked 1st in China's construction machinery industry for continuous 22 years, how about the performance of XCMG in the industry in recent years? What important key concepts and core values are highlighted by XCMG performance?
Wang Min: XCMG ranked 7th on the list of 2011 global top 50 construction machinery manufacturers, leading Chinese enterprises and realizing the best ever results since Chinese enterprises appeared on the list. We are not only happy about this, but also feel heavy responsibilities for this, XCMG has also demonstrated its world-class "style" in its own strength areas, XCMG ranks 2nd on the global Top 10 crane manufacturers list. Sales volume of truck cranes and large tonnage rollers continue to be the highest in the world. The sales volume of 12 types of hosts and parts continuously ranked 1st in China. In the newly released list of top 500 Chinese enterprises, XCMG ranks 123rd, leading the industry.
XCMG’s growth has benefited from China's rapid economic growth and global industrial development history. The most direct and micro level reason for XCMG success is keeping integrity, pursuit of customer value, product innovation, user-driven technological innovation, and value innovative ideas as its core values. In the future, XCMG will continue to promote its core values of quality, integrity, and customer value.

Innovative service models combining central government-owned enterprises and banking enterprises.

China News: We have noticed that XCMG had recently signed "strategic cooperation agreements" with central government-owned enterprises and financial institutions such as China Nuclear Construction, China Minmetals and China Industrial and Commercial Bank, how will this help the development of XCMG?
Wang Min: Currently, XCMG is striving to achieve the business objective of "100 billion revenue, international growth, and world-class products" at full speed. The partners, China Nuclear Construction and China Minmetals will become an important support for XCMG’s rise. Take China Nuclear Construction as an example, they are the pioneers in the Chinese nuclear construction industry and have already assumed, not only key national projects, but also large overseas projects, with high visibility in the industry. Under the agreements, both parties will carry out extensive cooperation in areas such as domestic and international projects construction, nuclear power engineering construction machinery and equipment R&D, co-investment and customer service. To realize leapfrog development in their respective areas, the companies will establish comprehensive strategic partnership relationships, and realize powerful alliances, with an objective of mutual gain.
In addition, in recent years, while building a comprehensive leasing, asset management, and corporate finance platform XCMG is stepping up the establishment of finance companies. XCMG actively promotes wider, broader and deeper business cooperation with banking enterprises through cooperation in all aspects such as credit financing, supply chain products, personal finance, finance companies, cash management, corporate annuity, international settlement, treasury operations, investment banking, insurance and "going out" business.
Currently, XCMG has signed "chief to chief" level strategic cooperation agreements with China Everbright Bank, China Industrial and Commercial Bank, Bank of China and Shanghai Pudong Development Bank. These "bank-enterprise cooperation" will provide customers with "one-stop business" with great convenience, also provide lower financing costs and more efficient "capital leverage" for the development of customers projects and XCMG. While achieving "customer-XCMG-Bank" Tri-win, it also accelerates the growth of the financial services sector and modern services of XCMG.

Breaking the global power of foreign companies depends on innovation.

China News: XCMG frequently has made huge strides, especially in independent innovation. How do you comment on XCMG’s performance in this important area?
Wang Min: As the industry leader, XCMG has always had the core value of customer value, enriching and creating the customers’ value in multiple steps and levels, such as product technology, manufacturing processes and technology service capabilities. With being ahead to the summit of global construction machinery technology as an innovation objective, XCMG convenes the most high-end mechanical engineering and technical personnel in China. Relying on a strong R&D strength and years of dynamic investment and painstaking accumulation, the R&D results of XCMG are entering an important harvest period.
In the first half of this year, XCMG has been authorized 262 patents, including 9 invention patents, more than the amount in 2010. "Iron Spider-Man" step walking style mountain excavator was awarded the National Science and Technology Progress Second Prize. The 1,200-ton full ground crane, 2,000-ton crawler crane and 12-ton loaders have passed appraisal and began to sell, breaking the dominance of foreign enterprises worldwide, having fundamental influence and effectiveness in the industry and playing an important role in the national key projects. In the development of the core components, XCMG has independently broken through with the innovation of high-end hydraulic cylinders and new gearbox, breaking the bottleneck in rotary bearing, drive axle and engine through multi-national joint ventures with Germany, the United States and South Korea through joint and collaborative innovation. It also accelerates breakthrough in the core technologies of pumps, valves, motors and other hydraulic components.

This year, XCMG has been authorized to be the exclusive in the first group of Chinese technology innovation demonstration enterprises in Jiangsu by two Chinese ministries.

Taking up high level of technology with global distribution of R&D centers

China News: Recently, the XCMG Nanjing Research Institute has inaugurated. Over the years, as the most important innovation body in China's construction machinery industry, the contribution of XCMG to technological innovation in the industry is widely acknowledged. As the cradle of technological innovation, the Research Institute has played an important role in the development process of XCMG. How would you evaluate the XCMG innovation system of the Research Institute?
Wang Min: XCMG will continue to increase independent innovation, and accelerate the establishment of all domestic and foreign R&D platforms. The global layout of the R&D centers is the important strategic direction of XCMG during the "twelfth five-year-plan". Jiangsu Xuzhou Construction Machinery Research Institute, with total investment of one billion RMB, is in construction, which will generate a large international R&D platform with dynamic and innovative global influences. Base on two companies with acquisition from Europe, XCMG is stepping up the construction of XCMG European Research Institute. XCMG factories and engineering centers in Brazil, with total investment of 200 million USD, are stepping up the construction. While establishing XCMG Nanjing Research Institute, Shanghai port exporting manufacturing base and XCMG Shanghai Institute will also be under construction.
These new platforms will promote XCMG to speed up gathering global technology resources and high-end talents at home and abroad, injecting new impetus in achieving objective to reach the world's top technology summit of the industry, speeding up mastering more core technologies, and always firmly occupying the technology commanding heights of the domestic industry. XCMG will depend on the follow-up policy support for national technology innovation demonstration enterprises, actively carrying out the works of technological innovation demonstration enterprise according to the dynamic management requirements for national technology innovation demonstration enterprise, implementing technical innovation, and providing a strong scientific and technological support for XCMG development objective in the "Twelfth Five-Year-Plan".

Innovation management establishes information-procurement platform for XCMG.

China News: Informationization establishment has always been people’s focus. The start up of the first truly information-procurement platform in the industry marks that XCMG leads the information construction in the industry, what valuable work experience does XCMG gain on informationization establishment? What management innovation breakthroughs have been achieved by XCMG?
Wang Min: XCMG’s construction of information-procurement platform involves a wide range and large difficulty coefficient, its successful start-up depends on a lot of efforts from all project team members, it also reflects that XCMG has cultivated a combined management personnel team not only understanding the business, but also information through informationization establishment. "XCMG informationization overall enhancing project" is an innovation project, a basic management project bearing XCMG’s future development, achieving strategic transformation of the group. XCMG expects high of this management project. According to the planning principles of group informationization "vertical platform, horizontal integration, collaborative operation, and intelligent analysis", which will ultimately achieve operations at corporate headquarters, marketing center, and dealers three levels, and create a comprehensive value community of XCMG.

In recent years, in management innovations and breakthroughs, XCMG also achieves coming into market after reconstruction, raising fund of 5 billion RMB in A share market, launching the H-share issuance plan, rebuilding the brand, resources, product lines advantages and capital market appeal and speeding up improvement of XCMG’s capability and international pace. By the control shift and refining management, it promotes integration of personnel, finances, production, supply and marketing, mechanisms, and systems centralized procurement of bulk materials and overall enhancement of informationalization, highlighting the whole value chain competitive advantage and effectiveness and efficiency advantages. Profits and taxes at the end of the "Eleventh Five-Year-Plan" are over quadruple and triple than those at the end of the "Tenth Five-Year-Plan", respectively.

Leading the industry internationalization, taking up the forefront of some national markets

China News: This year, XCMG has signed the largest export order in China’s construction machinery history. Implementation of internationalization strategy is the focus of XCMG’s development in recent years, how about the current internationalization process of XCMG?
Wang Min: XCMG implements a positive, safe, three-step globalization strategy, forming a global network of more than 100 sales and service agents, distributing their products to 147 countries and regions in the world, cumulatively achieving export valued 2.6 billion USD in the "Eleventh Five-Year-Plan", increasing by 9.1 times compared with that in the "Tenth Five-Year-Plan", with export earnings and gross exports of five main hosts continuing to rank 1st among the industry.
Particularly in March this year, XCMG high-level delegation visited Bolivarian Republic of Venezuela, whose President, Chavez, has met with them in person. After several rounds of negotiations with Venezuela's oil company, XCMG eventually signed the largest export order of China’s construction machinery with the full range and complete construction machinery products advantages, excellent brand image and reliable product quality, as well as powerful and industry leading manufacturing and service support capabilities. In this project, XCMG has exported a total of 6,025 units of construction machinery equipment to Bolivarian Republic of Venezuela. In the aspect of a single order, both the order amount and the number of equipment have been the first in the export of China’s construction machinery and global construction machinery market, but also the first Chinese large-scale manufacturing groups independently undertaking and carrying out exports of sets of construction machinery.
XCMG internationalization is undergoing increasing higher speed, more intensive and wider, achieving a market-leading in some developing countries. Exports amount in the Brazilian market in 2010 exceeded 130 million USD, share of truck crane accounts for 46%. In the Polish market, loaders share reached 70%. Overall share in Kazakhstan ranks 1st, and the Top 3 in Australia and Russia.

Finds new growth in western development and enters into Xinjiang market.

China News: On August 4, XCMG has signed an investment agreement on XCMG Xinjiang equipment manufacturing base project with Urumqi Economic Development Zone, representing the official implementation stage of XCMG Industrial Park, how do you think of Xinjiang and Central Asian markets? What is the significance of the project to development strategy of XCMG?
Wang Min: Xinjiang market is an emerging promising market in recent years. In particular, as the resource base and the bridgehead opening to west developed greatly by central government in recent years, Xinjiang will initiate a new round of rapid development of China's construction machinery market. XCMG seizes the favorable opportunity of reasonable investment cost, focusing incentives policies, to timely develop equipment manufacturing base in Xinjiang. The project is located adjacent to Urumqi DiWoBao international airport, Western Railway Station and ukwi highway, covering an area of 1300 acres with a total investment of 2.5 billion RMB. It mainly produces earthwork machinery, concrete machinery, construction machinery and other products. The annual output value is expected to reach 6 billion RMB. The project will become the R&D, manufacturing, sales and export center of construction machinery products of XCMG radiating northwest provinces and the Central Asian countries, and with this as a platform to expand it to a new industry area with broad market prospects combining the special geographical and resources advantages of Xinjiang at an appropriate opportunity. The project has potential and far-reaching strategic significance to XCMG in completing layout system of its global manufacturing bases, deepening regional markets and strengthening the brand image of XCMG.

Global production base layout from China to the world by "connecting the dots into a line"

China News: What are the considerations of XCMG on the overall layout of bases domestically and globally?

Wang Min: To speed up a new round of major breakthroughs in all the plates of XCMG, the layout orienting the whole nation and world is accelerating. XCMG currently possesses 19 major projects under construction, with a total investment of over 20 billion RMB on major construction projects in the "Twelfth Five-Year-Plan". Among them, the large tonnage crane base proceeds smoothly, loaders and concrete machinery bases concentrate started, the Brazilian base, Shanghai port base, excavator base, heavy truck base and Xinjiang base construction will start, Indonesia base, South Africa base, Eastern Europe base and Indian base are in research process, which will be implemented as soon as possible.
Jiangsu Xuzhou Construction Machinery Research Institute construction accelerated, Nanjing Research Institute inaugurated, joint venture with South Korea's Doosan engine is completed, and construction of European Research Institute with two hydraulic component system development companies merged in Europe also speeded up. The implementation of global flagship store, one thousand 4S stores nationwide and 25 international customer service system construction projects are undergoing higher pace. XCMG global manufacturing base, R&D centers and marketing network layout is increasingly clear, with this as a new and important driving force, the expansion and promotion of XCMG in the domestic and global market is also "connected from the dots into a line", releasing greater vitality and competitiveness.

Remain optimistic about China's economic growth in the long term and find new point of growth in the world

China News: Since the second quarter of this year, some product sales in the national construction machinery market declined, and the industry growth rate dropped as well, the industry "inflection point" remarks have appeared. In the current relatively bleak situation for the industry as a whole, how does XCMG understand and treat the "Twelfth Five-Year-Plan", and how to realize "100 billion, international, and world-class" development objective in the "Twelfth Five-Year-Plan"?
Wang Min: Construction machinery industry is with strong correlation with economic cycle and the national investment policies, just as such, although the current development of the industry is facing great challenges, we have very firm confidence that China’s construction machinery still has good growth prospects in the "Twelfth Five-Year-Plan" in terms of long-term good development of China's economic fundamentals, China's urbanization rate gap with the developed counties and the huge demand in water conservancy construction, indemnificatory apartment construction and other infrastructure construction, as well as the process of Chinese enterprises speeding up going out and internationalization.
XCMG should take the valuable opportunity of the "Twelfth Five-Year-Plan" to continuously transform and reach breakthrough, ranking 1st in the industry eternally. During the "Twelfth Five-Year-Plan", XCMG will expand products and capital markets, facing towards the world, broaden and enhance construction machinery, heavy truck host product and core components areas, facing customers and enter into the high-end equipment manufacturing, facing the future. It strives to achieve operating income of over 100 billion RMB next year, and achieves operating income of 300 billion RMB by 2015, ranking top 3 in global construction machinery manufacturers.
To achieve the "Twelfth Five-Year-Plan" strategic objectives, XCMG will work around a center, that is, change and adjustment, optimization and upgrading, fully implement the organization and management transformation and innovation project. According to the arrangements and deployment of Xuzhou city Party committee and city government, it will speed up new equity incentives mechanism for management and technical backbone, employers, salaries and incentives methods innovatively driving all employees aiming at target of 300 billion, injecting new vitality and power into a new round of development of XCMG. Around four businesses and four processes, changing operating mode, management and control mode as well as business mode, adjusting the industrial structure, product structure, technology and organizational structure, gathering high-end talent domestically and internationally with an open, inclusive, innovative, hard working corporate culture of XCMG, forming system processes and resources capacity adapting to the scale of 300 billion and global top 500 strategic, laying a solid foundation for full breakthrough in scale, strength, products, markets and plates of XCMG. XCMG will achieve two breakthroughs, on the one hand, unifying and integrating the overall operation of construction machinery listed companies to achieve the rapid development and continuous double objective in the "Twelfth Five-Year-Plan". On the other hand, it will achieve integration of "heavy truck and special vehicle", and create a competitive heavy truck and special vehicle plate. XCMG will also improve three abilities. First, enhance the development capability in the core plate, especially earthwork machinery, concrete machinery resources integration and growth double. Secondly, advance competitive capability in fast internationalization, especially winning share from the strongest opponents globally. The third is to enhance the innovation capability in operation of large-scale capital and global mergers and acquisitions as well as successful integration.
In the future, XCMG will further accelerate the upgrading and restructuring for the "modern, service-oriented manufacturing enterprise", actively attracting more and more leading concepts and modes, upgrade the management operating system. Meanwhile, XCMG will further progress the construction of technical system with Xuzhou Construction Machinery Research Institute, Jiangsu and the National Technology Center as the main body in the next few years,. XCMG will achieve a breakthrough firstly in the core and manufacturing technology, such as intelligent, lightweight, energy-saving and environmental protection and self-development capacity in high-end products, focusing on improving R&D capabilities for core components and the application level of intelligent automatic control technology and moving in full power towards the summit of global construction machinery technology. We will also speed up the internationalization process, achieve the transformation "from China to the world and complete industry ambitions and dreams of "forward the world from the east".