China Machine Tool Industry Faced New Opportunity

There was a series of bad news about world machine tool industry in 2004. At the beginning, two famous Germanic enterprises WALDERICH COBURG and WALDRICH SIEGEN became insolvent because of misconduct. Then America Machine Tool Vendition “HONOR” Commercial Assn. disaggregated as a result of the bad economic state. Later, the world famous manufacturer DEAWOOD was bought by DOOSAN, the biggest consortium in Korea.

Under this background, after Germany GILDEMEISTER AG, Japan MOKINO, TOYATA, Italy RIELLO, Germany HOERBIGER, Korea DEAWOOD etc. settled in China in 2003, being attracted by the Chinese machine market, USA HARDINGE, AMT, FORMTEK GROUP, Korea CERATO, Germany SCHLEIFRING came into China on large scale in 2004. And the machine tool market of China became more internationalize. Some authority persons point that Chinese machine tool industry has faced a new strategic development opportunity.

Joint-venture and cooperation are a shortcut.

China has become a big manufacturer of machine tools. But if our country wants to realize improving the quality and increasing the amount of our machine tool, there is no doubt that joint-venture and cooperation with the multinational companies are a shortcut.

Dalian Machine Tool Factory first realizes this short cut. The 10 companies which Dalian machine tool factory has realized joint venture and cooperation with are all big companies of final level in the world, whichever the INDEX Company of Germany or the largest lathe manufacturer 600 Group of England. In all the joint venture cooperation company, Dalian Machine Tool Factory always holds 70% stock. This joint venture and cooperation type is carried out with Dalian Machine Tool Factory as the main owner. This principle not only made Dalian Machine Tool Factory head-on come up with the international advanced level, but also developed domestic and foreign markets and provided several flexible manufacture lines which are composed of nearly 100 sets of high-speed machining centers for the international automotive engine manufacturers. 

On Dec. 8, 2003, The BY JC-OKUMA (Beijing) Machine Tool Co., Ltd. held its practice ceremony. It is the sign of the joint venture and cooperation between Beijing No. 1 Machine Tool Factory and the multinational company entered into one new phase. It is reported that BY JC-OKUMA (Beijing) Machine Tool Co., Ltd. has put into production in due form, and manufactures more than 20 sets of cnc machine tool every month. The quality of the machine tools manufactured by BY JC-OKUMA (Beijing) Machine Tool Co., Ltd. has reached the level of Japan OKUMA.

Joint-venture and cooperation are a course　of learning.

The course of joint venture and cooperation is also a course of learning. But the effects of learning indeed and not, are too different. April 4th, on the 9th China International Machine Tool Exhibition, the president of Jinan No.2 Machine Tool Group, Zhang Zhigang introduced that in the course of learning indeed their international cooperation formed new feature. As their partner developed from one company in U.S.A. to nine enterprises in U.S.A., Germany, France, Japan, Sweden, and Switzerland six countries, No. 2 Machine Tool Group advanced their freedom and mastered the initiative in cooperation. And they also developed from the simple technology introduction before, to the cooperation items which guided by market and based on orders. The cooperation faced domestic and foreign two markets, for marketing, design, manufacture and so on. It can carried out during the whole course or only in one or several steps; it also can be owned and run by both sides or only by one side with the other side participating. Jinan No. 2 Machine Tool Group’s cooperation built an international union with multinational, and obtained the status of “King in Forging Industry, Doyen of CNC Machine Manufacturers” in domestic machine market.

Guilin machine tool industry also quickened their steps of international cooperation these years. “By the cooperation with Germany, Japan, Italy, and U.S.A., they have had 23 sorts, more than 600 kinds of CNC products.” the president Yin Xiangdong said.

Joint-venture and cooperation are not aim.

Of course, it isn’t the aim to make joint venture and cooperation with multinational company. Otherwise it is just a speciosity. The aim of joint venture and cooperation is to quicken the course of China becoming a great power of machine tool from a big manufacturer.

It is quite plain that China has strided her first step of this change: the situation that taking state corporation as the main body in machine tool industry is being broken; the sale of enterprise and enterprise group has reached 3 billion for the first time, for example Shenyang Machine Tool Factory, Dalian Machine Tool Factory etc. and it is hopeful for Shenyang Machine Tool Factory to ascend into the position before No.20 in world machine tool industry; it has formed some famous brands, and Shenyang Machine Tool Factory, Dalian Machine Tool Factory, Jinan No.1 Machine Tool Factory and Qiqihaer No.1 Machine Tool Factory etc. have been awarded the title of China Famous Brand Product.

It is obvious that there are many standards to judge whether it is a victory or a defeat for one enterprise which made joint venture and cooperation with one multinational company, for example: Whether the self-innovate capacity of the enterprise has ascended? Whether the developing speed has quickened? Whether the economy benefit of enterprise has improved? And so on. However a more important standard is the market rate has ascended or descended. The stat. data makes clear that, in 2004 the market rate of homemade machines has descended from 38.6% in 2003 to 37.4%———-This is only the report from custom, and haven’t taken the machine tools sales of multinational company in China into account. If including that, the vice minister of China Machine Tool Industry Association, Mr. Chen Yanlin thinks that the market rate of Chinese machine tool will descend more. He also worries about the low benefit of some companies which has made joint venture and cooperation with multinational company. For example, in Ningxia there is a “little giant” company made joint venture with Japan MAZAK Company. But Mr. Chen said, “The result of joint venture has not obviously reached original expectancy.”

As, the honorary board chairperson of China Machine Tool Industry Association Mr. Liang Xunxuan said, to become a great power of machine tool from a big manufacturer of machine tool, “For the technique, it should basically fit to the market demand, and for the production capacity the sale should satisfies the market demands no lower than 60%, and the export should be no lower than 10% of production value.

Obviously, China machine tool industry has a long way to go to become a great power of machine tool from a big manufacturer of machine tool. And joint venture and cooperate with MNC is really a new strategy development opportunity for the machine tools industry of China. If we seize this opportunity, there will be a breakthrough in machine tool industry of China, and we will become a great power from a big manufacturer. Oppositely, if we miss this opportunity, our machine tool industry may fall to an attaching industry which only produces spare parts or assembles supplied parts, and lose their competitive position in world industries scope.