Yesterday learned from the China Heavy Machinery Industry Association that the target for the average annual increase in production and sales of the heavy machinery industry during the “12th Five-Year Plan†period is 16%, with a cumulative compound growth rate of 110% for 5 years, and 5 to 6 sales income exceeding RMB 30 billion. , 1 to 2 large equipment manufacturing enterprise groups with sales revenue exceeding RMB 50 billion. At present, the leading companies in the heavy machinery industry such as Zhenhua Heavy Industry, Taiyuan Heavy Industry, China First Heavy Industries, and Heavy Duty Heavy Equipment etc. all had sales revenues of less than 20 billion yuan in 2010. This means that the above companies have huge room for growth in the next five years. "Twelve Five Years" Doubled Production and Sales Scale The China Heavy Machinery Industry Association has made it clear in the “12th Five-Year Plan†of the heavy machine industry that has been established that the industry’s goal for the next five years is to increase production and sales by an average of 16% annually, and to increase profits by 20%. According to this standard, the scale of production and sales of the heavy machine industry will increase by more than 110% cumulatively at the end of 2015. Association members also pointed out that during the “Twelfth Five-Year Plan†period, the heavy machine industry must change blindly to expand production capacity, one-sided pursuit of output value, extensive high-speed development model, will develop high-end equipment as a major breakthrough in improving the competitiveness of enterprises. He said that as an important category of strategic emerging industries - the main features of high-end equipment manufacturing are large-scale, complete sets, advanced technologies, and high levels of intelligence. "At present, only a few advanced industrial countries in the world, such as the United States, Germany, and Japan, have high-end manufacturing levels. If China wants to move from a big equipment manufacturing country to a strong equipment manufacturing industry, it must make breakthroughs in high-end manufacturing." To this end, the plan is clear: During the “Twelfth Five-Year Plan†period, the heavy machine industry needs to master a number of core technologies in the field of high-end equipment manufacturing to form a group of internationally-renowned brands with independent intellectual property rights. The new product rate in the industry exceeds 30%. The quality and quantity of products have been significantly improved. More than 30% of the product technology and quality levels have reached the international advanced level. Improve access to certain segments of the industry In view of the current disparity in the local high-end manufacturing sector, the Association believes that the large-scale enterprises’ lack of previous R&D investment, insufficient technology reserves, and the inability to keep up with the sudden changes in domestic and foreign markets are the main reasons for their weak competitiveness. According to the introduction, the current heavy machinery industry also has the phenomenon of excessive low-end production capacity and fierce market competition. At present, the price war of some products has reached a level of enthusiasm. The unnecessary price war will inevitably consume the resources of the company and further affect its investment in research and development. To this end, the association's sources said that for sub-industries that include excess capacity, including gantry cranes, the entry threshold should be raised in the future, and a batch of backward production capacity should be eliminated at the time of replacement. The association also placed high hopes on leading enterprises and called for vigorous promotion of mergers and reorganizations in the next five years to increase industrial concentration and foster the formation of large-scale enterprise groups with complete sets of equipment, general contracting of projects, international trade, investment and financing capabilities, and the formation of 5-6 sales revenues. More than 30 billion yuan, 1-2 large-scale equipment manufacturing enterprise groups with sales revenue exceeding 50 billion yuan have international competitiveness.
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