Shanghai Zhenhua to continue global growth

Shanghai Zhenhua Heavy Industries Co Ltd's booth at the China International Offshore Oil and Gas Exhibition in August 2011 in Shanghai. The company registered a net profit of $30 million yuan ($4.7 million) last year. [Photo/China Daily]

Officials at China's top machinery maker are confident that the continued diversification of its portfolio, aimed at producing high-caliber products at the lowest possible price, will ensure it maintains a powerful position in the global market, despite a decrease in international demand for shipbuilding and major infrastructure projects.

As the main components for its latest high-profile project, Norway's Hardanger Bridge, eased their way out of port in Shanghai on Wednesday, Shanghai Zhenhua Heavy Industries Co Ltd, formally known as Shanghai Zhenhua Port Machinery Co Ltd, insisted it feels well-positioned to weather the current choppy economic waters and wrestle market share away from under-pressure competitors.

The steel structures for the main body of the bridge, heading for Scandinavia, mark the company's first venture into Europe in steel bridge-making. They mark the latest step in a global expansion that involved 82 countries and regions this year, it said.

Hardanger is a suspension bridge that will have one of the longest spans in the world after it replaces a ferry connection for long-distance travel and transport in Southwest Norway.

Helge Eidsnes, regional road manager of the Norwegian Public Roads Administration, said he was fully confident that what are complicated requirements - for Norway's longest bridge - will be met by the Chinese contractor, on-time and on-budget.

Shanghai Zhenhua Heavy Industries is considered the largest heavy equipment manufacturer in the world, and has in the past five years expanded into producing a wider range of industrial machinery - including heavy cranes, offshore engineering ships and large steel parts - on top of the traditional port equipment with which it dominates the world market.

It's that diversification, in reaction to an economic slowdown that has slashed global demand for shipbuilding, and its ability to cash in on other overseas infrastructure works, including bridges and offshore machinery, that has played the main role in its success, said Tan Guangren, the company's public relations officer.

Its most recent annual report showed that in 2011, Shanghai Zhenhua Heavy Industries signed $4 billion worth of manufacturing contracts, 80 percent of which came from advanced economies in Europe, America and Asia.

Despite ongoing global economic turmoil, the company registered a net profit of $30 million yuan ($4.7 million) after seeing a severe loss in 2010, whereas most of its competitors were firmly in the red.

More than 60 percent of its revenues generated last year were attributable to overseas deliveries.

According to Tan, the ability to combine high-caliber products with lower prices is also important in combating the ongoing recession in the West.

"International buyers approach us because they know of our reputation for sound, cost-effective products," he said.

Apart from the Norway project, the company has just kicked off one for a bridge project in Scotland, which involves 111 steel box beams and various other steel structures and is due for delivery in September 2014.

Industry insiders say that Chinese heavy machinery makers may quickly catch up with their rivals in South Korea and Singapore, as the industry moves away from technology and manufacturing and toward being more about project operation and management, leaving companies that are willing to diversify, such as ZMPC, perfectly positioned to continue to expand.

hewei@chinadaily.com.cn