Sany Group, a leading producer of construction machinery, said it will continue to seek merger and acquisition opportunities in the European Union after announcing a plan earlier this year to buy a German rival.

"We have made quite a lot of investments overseas during the past five years, and we will be increasing our investments in the years ahead," Liang Wengen, chairman of the company, said on Sunday on the sidelines of the 18th National Congress of the Communist Party of China in Beijing.

"We will increase our greenfield investments abroad and will also strengthen our investment deals through the use of M&As.

"We won't rule out the possibility of making more purchases in the European Union, especially since the European debt crisis is giving us many good opportunities."

Earlier this year, Sany announced it had acquired Putzmeister, a German manufacturer of concrete machinery.

Sany has made greenfield investments, or investments that are unrestrained by work from previous projects, in the United States, India, Brazil and Germany.

"Generally speaking, the majority of Sany's investment deals abroad have been successful, except for in a few cases," said Liang, alluding to US President Barack Obama's decision to block a wind farm project the company had planned to undertake in the United States.

In October, Sany filed a complaint at the US District Court in Washington alleging that the president had overstepped his constitutional rights by preventing the company from owning four wind farms in Oregon.

In an interview on Saturday, Liang said the company is determined to "fight to the end" in the case.

Since the financial crisis, China's outbound direct investment has increased despite the decline in global foreign direct investment. That was the result in part of the rising value of the yuan, as well as Chinese companies' increased needs and greater ability to expand globally.

To succeed in the overseas market, Chinese companies must become better acquainted with the rules and regulations of the market and make sure they have large pools of talented workers, Liang said.

Sany said it aims to have from 40 to 50 percent of its sales revenue come from abroad in five years. The company expects the value of its overseas sales to be 10 billion yuan ($1.6 billion) in 2012, an amount equal to 15 percent of its total sales, Liang said.

To reach that goal, "we will have to do two things", Liang said.

"Those are: add greenfield investments and pursue more mergers and acquisitions", he said.

"I have to say that Sany's business fundamentals are pretty good, although there has never been an end to the rumors about large staff reductions and similar matters," said Liang.

Reports started coming out in July saying that Sany had made large reductions to its workforce.

Many observers took that as a sign that the country's industrial sector was slowing down.

Sany's net profits fell by 28 percent in the second quarter, its biggest quarterly profit drop since 2008.

"We cannot avoid temporary business adjustments, but these won't last," he said. "I am confident about our long-term business."

Recent official statistics have suggested that industrial production, fixed-asset investment and retail sales all accelerated in October, signaling a rebound in the country's economic growth.

dingqingfen@chinadaily.com.cn

(China Daily 11/12/2012 page5)