Doosan Infracore Aims to Increase Growth in the Chinese Market in 2019 by Improving Profitability
Following its impressive performance in China in 2018, Doosan Infracore will continue to pursue growth in the Chinese market this year while concentrating on further improving its profitability.
In 2019, the Chinese construction equipment market is expected to remain at a similar level to that recorded in 2018. Anticipating a five percent growth in its annual sales in the market in 2019, Doosan Infracore announced on 28 January 2019 that it would focus on improving its profitability in China throughout the rest of the year.
To that end, Doosan Infracore will continue striving to increase the sales of its lucrative mid- to large-sized construction equipment while expanding its strategic alliances with local partners to meet the increasing demand for its specialized equipment, including rippers* and rotary drilling rigs.**
* A ripper is equipped with a hook-shaped attachment instead of a bucket to dig hard soil or fragile rocks.
** A rotary drilling rig is equipped with a rotary drilling machine on its excavator arm (functional part). It is mostly used for vertical excavation during the foundation phase of a construction project.
As a result of its earnest efforts over the past few years, Doosan Infracore has increased the sales proportion of its lucrative mid- to large-sized excavators to 40 percent in the Chinese market. The company is planning to further increase the proportion in 2019 by concentrating its sales and service competencies in areas where numerous infrastructure development projects are being carried out, as well as mines and quarries.
Doosan Infracore has just signed a memorandum of understanding (MOU) with Yutong Heavy Industries of China to supply the excavator upper structures required for the manufacture of 1,200 rotary drilling rigs (worth KRW 250 billion). At the beginning of 2019, the company also signed a contract to supply 36 large-sized excavators, including 80-ton excavators, with a new major customer in Inner Mongolia, one of China’s largest mining regions.
In addition, Doosan Infracore plans to further improve its profitability in 2019 by focusing on geographical areas where its sales competency has yet to be strengthened, as well as boosting its proportion of cash sales and improving its receivables management in China.
“Doosan Infracore was the only foreign company among the world’s top 5 leaders to increase its share of the Chinese excavator market in 2018, except for local (Chinese) companies,” declared an official of Doosan Infracore, adding, “At the beginning of the new year, China is likely to expand its investment in infrastructure, thereby creating a possible opportunity for Doosan Infracore to achieve additional growth beyond its planned sales increases in 2019.”
In 2018, Doosan Infracore generated KRW 1.4 trillion in annual sales in China, showing a massive 50% increase over the previous year in the country. The 2018 figure also represents a 400% increase in sales during the latest four years. The company’s share of China’s excavator market rose from 8.3% to 8.5% between 2017 and 2018.