22 years ago, Zoomlion's predecessor was still a pure research institute, struggling to survive on meager scientific research funds;

 

　　　22 years later, Zoomlion, born out of the research institute, has grown into a leader in China's construction machinery industry and ranks among the global top 6 in the same industry;

 

　　　Starting from a 500,000 yuan loan to a fortune of nearly 90 billion yuan, the leap in data seems simple, but the story behind it is stirring.

 

　　　After more than 20 years of transformation, a traditional research institute has evolved into an international large enterprise fully adapted to the market economy. A globalized Zoomlion is dancing with the world with a steady posture.

 

　　　Forced to Test the Waters: Finding Rice to Cook After the 'Imperial Grain' Was Cut Off

 

　　　Zoomlion's predecessor was the Changsha Construction Machinery Research Institute of the Ministry of Construction (referred to as 'the Institute').

 

　　　Founded in 1956, the Institute was the only applied research institute in China integrating construction machinery research and development with industry technology coordination. It once exported technology to all national construction machinery enterprises such as XCMG and was known as the 'birthplace' of technology in China's construction machinery industry.

 

　　　On March 13, 1985, the national decision on science and technology system reform was issued, and the Institute became a pilot unit for the national science and technology system reform.

 

　　　'Later I realized that the reform pilot meant starting to reduce institutional funding.' recalled Chen Runyu, former director of the Changsha Construction Machinery Research Institute. 'At that time, there were about 500 people in the institute, and the total annual income was only about 2 million yuan.'

 

　　　Once the 'imperial grain' was cut off, the Institute was forced to find rice to cook.

 

　　　Each research office 'crossed the sea by eight immortals, each showing their magical powers', transferring their scientific and technological achievements for compensation and establishing research-production consortiums with various manufacturers. For a time, those technologies that once represented the height of the industry and thus received national funding and awards became hot commodities. The income of researchers increased significantly, and the Institute enjoyed a period of prosperity.

 

　　　But later, some factories gradually failed to honor their commitments, delaying the promised commissions, and the consortiums formed between research institutes and factories gradually disintegrated.

 

　　　'In the 1990s, the state began to advocate the integration of science, industry, and trade, and the Institute decided to engage in industry itself.' Chen Runyu introduced. At that time, everyone was highly motivated to industrialize, and more than 20 small companies suddenly emerged from the Institute, with over 20 accounts set up.

 

　　　'However, this path soon became unworkable.' recalled Long Guojian, former chairman of the Supervisory Board of Zoomlion and then deputy director of the Institute. At that time, scientific and technical personnel flocked to quick and short-term projects, while major basic research projects with large investment and long cycles were neglected; more than 20 'warlords' fought separately, with funds and technical forces dispersed, and only a handful were profitable. The management of the Institute also became distorted into a 'director responsibility system under the leadership of office directors', and the overall strength declined day by day, with talent beginning to 'fly southeast like peacocks'.

 

　　　The Institute became increasingly impoverished, while some enterprises that had obtained technical drawings from the Institute were rising rapidly. Long Guojian recalled, 'A machinery factory in Shandong spent less than 10,000 yuan on technology transfer fees and achieved a 'plate' of tens of millions in a year; a machinery factory in Hunan introduced technology from the Institute for less than 50,000 yuan and achieved tens of millions in the same year.'

 

　　　They could not 'sit on a golden rice bowl and have nothing to eat'!

 

　　　On September 28, 1992, Zhan Chunxin, then deputy director of the Institute, led 7 technical personnel and borrowed 500,000 yuan to establish Zoomlion Construction Machinery Industry Company, beginning to explore the marketization path of research institutes. A transformation from cocoon to butterfly thus began.

 

　　　From Cocoon to Butterfly: From Making Products to Making Standards

 

　　　When Zoomlion was founded, the land of China was surging with wave upon wave of construction. But the construction machinery market was flooded with a large number of foreign brands. Among them, overseas brands of concrete delivery pumps occupied 95% of the Chinese market.

 

　　　Zoomlion targeted concrete delivery pumps and quickly developed products that suited the market.

 

　　　In 1993, China's first generation of concrete delivery pumps with completely independent intellectual property rights was born at Zoomlion. That year, it created an output value of 4 million yuan and realized profits and taxes of 2.3 million yuan.

 

　　　In early 1994, just when the company's products were in short supply, the concrete delivery pumps already sold experienced quality problems.

 

　　　Having just tasted success, the company fell into a dilemma: to seek profit or to protect brand image?

 

　　　Faced with the situation of technical personnel constantly 'fighting fires', Zhan Chunxin made a decisive decision: compensate customers for losses, halt production entirely, and have technical personnel do after-sales service; at the same time, improve the products.

 

　　　At that time, the company had a continuous stream of orders, and a full production halt meant 'the silver in hand went down the drain'.

 

　　　Faced with a chorus of opposition, Zhan Chunxin remained unmoved.

 

　　　After half a year of production suspension, the new generation of products independently developed by Zoomlion rolled off the line. Customers bought 45 units in one go, and the company made a profit of more than 10 million yuan that year.

 

　　　From then on, Zoomlion's products began to make a name in the Chinese market and showed their prowess at construction sites across the country. Today, China's concrete delivery pump market has undergone a dramatic reversal: domestic brands represented by Zoomlion occupy 95% of the market! International brands have all been acquired by Chinese companies.

 

　　　International technological barriers have been breached one by one, international benchmarks have been surpassed one by one, and new products filling domestic and international gaps have been born at Zoomlion one after another:

 

　　　The world's first comprehensive hot-mix recycling machine for asphalt pavement using hot air circulation rolled off the line;

　

　　　China's largest tonnage QUY3200 crawler crane was born, completely breaking the situation where China's large hydraulic crawler cranes were entirely dependent on imports;

 

　　　China's largest BG2100 cold milling machine for pavement was successfully developed;

 

　　　The world's largest wheeled crane came out;

 

　　　The 101-meter 7-section boom X6 pump truck and the D1250-80 tower crane became the world's longest boom pump truck and the world's longest working radius tower crane, respectively...

 

　　　Innovation continues, and records are still being updated.

 

　　　In 2008, it successfully acquired CIFA, the world's third-largest manufacturer in the global concrete engineering machinery field, pushing Zoomlion's concrete machinery to a new height.

 

　　　The exclusive purchase of the complete technology of the world's top-level German JOST flat-top tower crane series enabled Zoomlion's tower crane technology to achieve a leap from leading in China to leading internationally.

 

　　　Zhan Chunxin said: 'Whether an enterprise can become a century-old shop depends on whether it has brand awareness and international competitive awareness.'

 

　　　Today, this company, unwilling to do 'one-shot deals', has developed a large number of benchmark products, covering 13 major categories and 86 product series in the construction machinery industry, with more than 800 leading products; moreover, in each category, the world's most sophisticated core technologies are brilliantly presented.

 

　　　Market share is also constantly increasing:

 

　　　No. 1 in global market share for concrete machinery;

 

　　　No. 1 in global market share for sanitation machinery and tower cranes;

 

　　　No. 2 in domestic market share for truck cranes...

 

　　　'First-class enterprises make standards, second-class enterprises make brands, third-class enterprises make products.' Zoomlion, committed to the industrialization of scientific research achievements, has not given up research on basic and common technologies. A large number of high-end technologies regarded as 'stumbling blocks' by the industry, such as wear-resistant material technology for construction machinery, high-strength alloy steel welding technology, and electromechanical-hydraulic integrated control technology, have all been conquered by Zoomlion.

 

　　　Because of this, Zoomlion has also taken standards to the extreme—since the research institute era, an important responsibility of 'industry technology coordination' has been to formulate standards. The standards revised by Zoomlion cover more than 70% of the products in the entire industry.

 

　　　In July 2012, the secretariat of the ISO Crane Technical Committee (ISO/TC96), established in 1961, moved from the United Kingdom, the birthplace of the Industrial Revolution, to China and settled at Zoomlion.

 

　　　This is the first ISO secretariat in China's construction machinery industry.

 

　　　Formulating international technical standards and controlling the discourse power at the top of the technology pyramid is no longer just something for Chinese enterprises to look up to, but to speak out and dance together.

 

　　　Unfolding the world map, one will find that Zoomlion is setting up a 'world bureau':

 

　　　R&D centers have covered developed countries such as Germany, the United Kingdom, the United States, Canada, and Italy;

 

　　　Production bases cover North America, the European Union, ASEAN, and Southeast Asia;

 

　　　A holographic business network of global sales, agency sales, and after-sales services covers more than 100 countries and regions around the world;

 

　　　A huge industrial cluster composed of 17 business divisions and 15 industrial parks is advancing globally with the magnificent posture of a thousand sails racing!

 

Looking at the World, Focusing on 5 Major Industry Sectors

 

　　　'The era of high-speed growth in domestic construction machinery has gone forever.' Zhan Chunxin said in an interview with reporters recently.

 

　　　China's construction machinery industry has entered a trough. Due to overcapacity, reduced national infrastructure construction, and high construction machinery ownership, many construction machinery enterprises are struggling.

 

　　　Where is the way for China's construction machinery?

 

　　　And Zoomlion has long begun to deploy its troops.

 

　　　At the shareholders' meeting in June 2013, Zhan Chunxin stated that the focus of development would shift from the construction machinery sector to five major sectors: construction machinery, agricultural machinery, environmental industry, heavy trucks, and financial services.

 

　　　The pattern of Zoomlion's five major sectors advancing together has begun to take shape:

 

　　　Innovate product structure and continue to consolidate the leading position in construction machinery.

 

　　　On December 25, 2013, Zoomlion successfully acquired the German company M-TEC, the world's number one brand in dry mortar equipment. This acquisition made Zoomlion the world's number one brand in dry mortar equipment. In the next 3 to 5 years, Zoomlion's dry mortar equipment revenue will grow rapidly, and market share is expected to exceed 50%.

 

　　　On December 28, 2013, Zoomlion announced that it would lead the creation of a 10-billion-yuan agricultural machinery equipment industrial cluster in Bishan County, Chongqing.

 

　　　In the environmental industry, Zoomlion has also sounded the clarion call for takeoff. Zoomlion's Lugu Second Industrial Park has been completed and put into use. The industrial park is mainly used for the research and development and production of nearly 100 varieties in nine major categories of environmental industry products, such as sanitation machinery, kitchen waste treatment, and high-concentration wastewater treatment. After the project reaches full capacity, it will become the largest and most advanced R&D and production base for sanitation and environmental protection equipment in China.

 

　　　The capital market also favors Zoomlion: on January 14, 2014, JPMorgan Chase spent HK$33,079,600.8 to increase its holdings of Zoomlion shares by 4,767,200 shares.

 

　　　With the strategic layout of the five major sectors, Zoomlion's path to a world-class enterprise is becoming broader and broader.

 

　　　Not competing for position in China, but competing for position for China!

 

　　　On Zoomlion's industrial roadmap of 'using the world for me, manufacturing for the world', acquiring CIFA and joining hands with Morgan are just a prelude and overture... Zoomlion's goal of becoming a world-class enterprise is very clear: global top three; moreover, a rigid indicator is eye-catching: in the future, more than 30% to 50% of products and sales will be realized outside the Chinese market.