Shantui diversifying from core dozer line

Chinese bulldozer firm Shantui is building on its core competency of bulldozers, broadening its range as well as its operations – Mike Woof writes.

Bulldozer specialist 1171 Shantui has a clear policy of broadening its product range, having grown from being a small producer with a limited model line-up to become a major global manufacturer. The company began its diversification process in 1999, buying a road machinery range and then following this up with a line of concrete equipment in 2008. This process continues with new business opportunities being introduced and is proving successful as the company saw turnover of US$1.7 billion (RMB10.5 billion) in 2012, making it the world’s 19th largest construction equipment manufacturer according to one independent report.

However at the same time, Shantui continues to develop its bulldozer line, with -5 versions of the SD16, SD32 and SD42 being introduced in due course. While the 671kW SD90-5 was unveiled at 5930 Bauma China in late 2012 and was the first of the -5 models seen in public, this machine is in final development and will not be available on the market for another two years and the 313kW SD42-5 is the first production model of this new series to be unveiled.

The firm recently sold 50,000th bulldozer, and has both US and European certifications for its SD10YE model, while it has supplied and SD16 to a customer in the UK. Shantui produces more bulldozers than any other manufacturer in the world, with an annual production capacity of 15,000 units and a peak output of 11,000 machines in 2011, with its factory able to roll out a complete machine every 20 minutes when the plant is running at full capacity. Doug Slocum, media relations manager at Shantui commented, “Our core competence is bulldozers. We have 14 different power outputs and 120 different models in all.”

In terms of numbers, Shantui also now produces more bulldozers than either 178 Caterpillar or 2300 Komatsu and Slocum said, “Worldwide we are the leader in dozers.” He continued, “Our second oldest line is road machinery. We have four product lines for rollers and 38 models. Aside from rollers we have graders and pavers, with four models of each.”

Meanwhile wheeled loaders are another successful product line, with the new top-of-the-range 8tonne SL80W 8-tonne being aimed at duties in quarrying applications. This range is also important to Shantui and Slocum said, “After dozers these are our second best export line.”

The company has four factories in China with three more facilities planned. The Chinese factories have a substantial capacity and in a single year can to build up to 15,000 bulldozers, 7,000 road machines and 5,000 concrete machines.

Another of Shantui’s important strategies is its joint venture with the crane firm 2123 Manitowoc. This agreement is for the crane market in China with Shantui holding 51% of the stock and Manitowoc holding 48%, while another smaller Chinese partner holds the remaining 1%. The partnership developed as Manitowoc wanted to develop its share of the Chinese market and was keen to find a local partner, while Shantui was looking to diversify its operations into new market areas and add to its range of construction equipment including the bulldozers, road machines and concrete equipment. While Manitowoc had been present in the Chinese market for some time, this arrangement was with a small local partner and the company saw that to upscale its operations it needed a Chinese firm with a bigger presence.

The firm does not just build complete machines though and Slocum said, “One of our biggest businesses is supplying spare parts. We can produce up to 180,000 track shoes/year.” He added that many of these undercarriage components are supplied to Shantui’s rivals, including major manufacturers such as 161 Atlas Copco, Komatsu, 1170 Sany, 1173 Sunward, 359 Volvo CE and continued, “We also supply torque converters and gearboxes.”

The components business forms a major part of Shantui’s overall operations. Wang Feng, vice general manager of Shantui said, “Over 30% of Shantui’s turnover is from the components business.”

Production output for these components is substantial with the firm making over 20 torque converter models and producing 160,000 units/year, as well as around 50,000 gearboxes/year. The firm also makes hydraulic cylinders for other companies, with 15 standard units and 35 models including the less common types. And Slocum added that the company can even produce hydraulic cylinders to meet specific customer demands, including old models no longer in production.

While the Chinese market is important to Shantui, the firm also has strong exports, having supplied machines to 150 countries. The first Shantui bulldozers to leave China were bought by customers in Russia and Latin America is a particularly important market for the company’s continued growth. Slocum said, “Domestically we have a 55% market share in dozers and we have 75% of the dozer export business.”

A new technical centre is in preparation, and improved sales support is part of the plan. According to Slocum, “We’re developing a new research and development centre. It’s much bigger than the existing one which is in the factory site. It’ll have research and product testing facilities all in one. One of our main selling points is our service support. We provide anywhere, anytime support. We supply great value products and our goal is to become a leading international brand.”