Capital Equipment News June 2018

brand, and we have secured a committed distribution in Burgers Equipment & Spares, our dealer in South Africa and Namibia. Secondly, having the right support structure is of essence. Right support means appropriate infrastructure, parts support and technical capability to service the machines. With that in mind, in 2011 we set up a subsidiary in South Africa, LiuGong Machinery South Africa, to look after our regional interests. It’s about having a presence on the ground to see exactly what is happening in the market. If there are any problems, there is quick coordination with China to resolve the issues at hand to minimise downtime for our customers. MS: Added to this, you have also invested in a spare parts facility in the country to improve your backup support. LY: The spare parts centre carries an inventory of more than US$4-million at any given point. We also have in place a team of expert technicians to support our dealers with technical support and training. We have also invested in a training centre for all the major components on our machines, including engines, transmissions, axles and hydraulics. For example, we offer training on LiuGong ZF transmissions and LiuGong Cummins engines. This is very crucial in equipping our dealers and customers with the right technical support skills for our machines in the field. MS: LiuGong is renowned for its wheel loader range globally. What is your biggest volume driver in terms of product in the local market? LY: It’s an equal split between wheel loaders and excavators. Traditionally, LiuGong is well-known for its wheel loaders, but we saw that South Africa is largely an excavator-based market, and through a strong R&D regime, we have managed to design and build a product that can tackle the local operating conditions. Customers have come to

appreciate the rugged nature of our excavators, and this has allowed us to competitively challenge for a larger share of the big-sized excavator market, mostly in the 50 and 70 t range. We have proved that our product is very competitive in mining applications, a segment previously dominated by premium European and American brands. MS: You mentioned R&D, just how important is this component of your equipment manufacturing value chain? LY: R&D is very critical to our growth strategy. We continue to invest in this component of our equipment design and manufacturing to meet the needs of the global market. We need to be at the cutting edge to make the most of the demanding global equipment market. To restate the importance of R&D, in 2015, LiuGong officially opened a new R&D Centre, a high-tech 22 000m² facility in Liuzhou, where our south China headquarters is located. The centre comprises seven testing laboratories, a prototype workshop and an innovative office building to seat more than 1 500 engineers and support staff. MS: What is your outlook of the local market? LY: Last year was a very good year for the South African market. Figures released by the Construction and Mining Equipment Suppliers’ Association (CONMESA) show that 5 614 new units were sold during the year, marking a healthy 18,3% increase over 2016 results. Until then the decline in sales had seen the number of units sold dwindle from 7 250 units in 2013 to a low of 4 747 in 2016. I am convinced that this year figures will slightly increase for the whole market. However, we have already seen a big surge in our machine sales this year. Our first quarter figures have gone up 50% compared with the same period last year. This is largely a result of our efforts to improve customer experience over the years. ❂

Li Yi, GM of LiuGong Machinery South Africa.

MS: A greater focus on aftermarket support has been one of LiuGong’s recipes for success in the local market. How important is a strong support structure for the growth of an equipment brand? LY: There are two fundamental things to grow the market. Firstly, you need to have a right partner to look after the

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