Recently, Chenggong, recently silent construction machinery brand in Sichuan Province, once again attracted public opinion.

On October 16, Chenggong signed a contract with the European and American Industrial Park ( EAIP ) in Suining, and officially announced that it would be relocated from Chengdu city to Suining city for its new R & D and manufacturing base.

The state-owned Chengdu Hongqi Iron Works, which began in 1950, established "Chenggong" brand, a well-known wheel loader brand in China.It was originally one of the three major wheel loader manufacturers in this country.

Staying n Chengdu for nearly 70 years, why Chenggong decided to leave ? With the arrival of Chenggong, what kind of benefits for Suining ? 

Sichuan Daily October 25, 2019 Page 07

Why leave?

No mandatory requirements for location

On October 22, in Chengdu Economic and Technological Development Zone, a Russian language conference was held between the Central Asia region distributor team and Chenggong overseas market team. The major topic was how to let Chenggong brand penetrate into the Central Asian region.

Central Asia Dealer Photos

At the same time in the assembly workshop, several wheel loaders for foreign markets were being assembled simultaneously.

Chairman and General Manager of Chenggong, Mr. Zhu Wen biao (right).

As early as 1971, Chenggong designed its own wheel loader prototype. In the nearly 70-year history, Chenggong has undergone several rounds of adjustments in joint ventures and management systems. In 1994, Chenggong set up a joint venture with Kobe Steel Co., Ltd. to establish Chengdu Kobelco Construction Machinery Co., Ltd., which started a 23-years deep cooperation with Kobelco. According Chenggong data record, until Oct 26 of 2019, Chenggong's construction machinery products have been sold in domestic and foreign market for more than 120,000 units.

On October 22, a wheel loader about to be shipped to overseas markets was waiting for pre-shipment inspection.

On September 3, 2018, after more than three years of consolidation and rectification, Chenggong realized the company reorganization. Original shareholders withdrew, and the new team and new investors took over the Chenggong brand. Company full name also was renamed as China Chenggong Heavy Industry Machinery Co., Ltd.

Mr. Zhu Wenbiao, Chairman and General Manager of China Chenggong Heavy Industry Co.,Ltd, witnessed the development of Chenggong brand. In 1981, Zhu Wenbiao was admitted to Southwest Jiaotong University from his hometown in Zhejiang province. Starting with front-line employees, Zhu Wenbiao was promoted to the position of chairman of Chengdu Kobelco.

Chengdu Kobelco Construction Machinery Co., Ltd. production scene in 1997

With the growth of Chenggong and the expansion of Chengdu city, Chenggong gradually moved away from Chengdu downtown area, and experienced several relocations. Zhu Wenbiao believed that although Suining's industrial foundation and supporting facilities were far less mature than Chengdu and Suining geographical advantage was not as good as Chengdu, Suining location was acceptable to any construction machinery brand. "From the analysis of global cities development, the heavy machinery industry is generally located in second-tier or third-tier cities, and no need to squeeze space in first-tier cities."

"Suining welcomes Chenggong, and Chenggong also needs Suining." Zhu Wenbiao said that in the 23 years of cooperation with Japan Kobelco, he also fully felt the difference from the advanced world level. "Heavy industry needs a spirit of ten years to sharpen its sword. Chenggong will take root in Suining, aiming to build a classic high-end national brand, calm down and make up for shortcomings and seek development."

How to undertake ?

The truth opens the way

With the formal signing , Chenggong took a key step in the overall relocation.

Moving the current factory clusters in Chengdu Economic Development Zone, Wenjiang District to Suining,Chenggong plans to invest more than 5 billion yuan (about 0.714 billion USD) in a new site covering about 240 acres (about 160000 ㎡) for a world-leading level of engineering machinery R & D and manufacturing base for wheel loaders, and multifunctional attachments under wheel loader platform.

Suining Project Representatives

Chenggong Suining Base is planned to be fully constructed in September 2020, and will be put into production at the end of 2020. After full production, Chenggong plans to achieve an annual production scale of 20,000 units construction machinery, with an output value exceeding 10 billion yuan (  about 1.43 billion USD ).

Chenggong new factory

Suining European and American Industrial Park  ( EAIP ) , a new home chosen by Chenggong, located in Suining Economic and Technological Development Zone. The investment, construction and operation of the park were all entrusted to the enterprise, focusing on the cultivation and introduction of high-quality projects in the fields of high-end equipment, electronic information, auto parts, and industrial services.

"Business-to-business, naturally, we have a common language." Leng Zhenxin, deputy director of Suining EAIP, introduced that from the beginning of 2019, EAIP investment service team began to contact Chenggong. There were also many options for the destination. The final choice of Suining was moved by the true feelings of the Suining EAIP team. "

Before the formal signing of the contract on the 16th, all preparations for the construction of the Suining base were rolled out. To accelerate the construction of the base, a working group involving the tripartite personnel of Suining Economic Development Zone, Chenggong, Suining EAIP begun operation.

Chengdu Factory Zone in Chengdu Economic Development Zone

"Except for the preliminary preparations, the construction time is less than one year." Cai Zhengjun, head of Chenggong R & D and Manufacturing Headquarter, felt the urgency of the base construction time. Cai Zhengjun said Chenggong's heavy-duty precision equipments needing extremely high requirements for each construction link since the first phase of civil construction.

What does it bring ?

Big companies lead investment and foster new industry chains.

"Chenggong project has filled the gap in Suining's construction machinery industry and is a great event for Suining Industry." Commented by Xu Yong, deputy director of the Suining Economic and Information Bureau, with many years woring history in Suining Industry.

Machinery and equipment manufacturing is one of the five major manufacturing industries in Suining. At present, 91 different machinery  enterprises, including Sichuan JAC, Yunnei Power, and Siwei Environmental Protection, have gathered in this region.

Chenggong facotry with vegetable

"But we also need to admit the shortcomings." Xu Yong believed that, except for a few companies such as Sichuan JAC, Suining machinery and equipment manufacturing are mostly in the middle and low end of the value chain, with low technological content and low profit margins, especially without giant Equipment projects.

According to 2018 data, the overall operating income of Suining Machinery and Equipment Manufacturing was 17.3 billion yuan (  about 2.47 Billion USD ), accounting for 13.8% of the all Suining enterprises above designated size, and this industry's profit was only 893 million yuan ( about 127.6 USD million )

Chenggong needs Suining, and Suining also needs Chenggong.

"Chenggong will replicate the successful model of Sichuan JAC and Tianqi Lithium to lead the development of the industrial chain." Xu Yong introduced that with Chenggong Heavy Industry as the leader, Suining would accelerate the cultivation and introduction of more supporting projects that serve the construction machinery terminal products and made the industrial chain of Suining Construction Machinery bigger and stronger.

Plant greening

The dual characteristics of capital-intensive and technology-intensive are the reasons why Suining attaches great importance to Chenggong's brand.

Zhu Wenbiao introduced that the Suining base will not only be a first-class manufacturing base with a large investment in Chenggong, but will also be built into an intellectual high ground for advanced engineering machinery technology research and development. Along with the construction of Suining Base, Chenggong Heavy Industry and the European and American scientific research institutions to jointly build a technology research and development laboratory plan has also started simultaneously.