XCMG’s Large-tonnage Energy-saving Loader Leads the Industry

June 12, 2012

Preface
Xuzhou is a strategic point and birthplace of heroes since ancient times. However, the most conspicuous symbol of this city today is nothing but XCMG’s bright-yellow products found everywhere there. Having achieved the makeover of becoming a global player and being the deserving leader of China’s engineering machinery industry, XCMG acquires its unique nature – the unrivalled demeanor of a topgun, dauntless spirit of a do-or-die determination, and, the last but not the least, extraordinary attitude of making all efforts regardless to success or failure -- thanks to its birth place.

The loader making sector can be called the most mature and developed in China’s cosntruction machinery industry in terms of industrial development and market competition. In 2011, the total sales of loaders by 26 major manufacturers was 246,000 units, an increase of 14%. At such a rate, the industry came to the brink of a new round of reforms. The space for further increase is getting narrower, incomparable with the previous years. With the upgrading of the client requirement and market and estbalishment of emission standards in all countries, turbulences in and reshuffle of the industry are inevitable. While domestic loader manufacturing firms were still stuggling for market share at the cost of profitibility and development space, the foreign manufactuerers have already launched potential assaults on the Chinese construction machinery industry from the key technology angle.

Under the difficult and hardly sustainable circumstances of industrial reshuffle, restructuring, market confusion and price wars, who is capable of leading the industry onto a road of sustainable development and out of the mayhem?

Perfect Breakthrough
XCMG has launched the large-tonnage and energy-saving loader that has attracted high-end loader users in China following 5 years of fundamental R & D and great amount of fund and human resources inputs. In the technological brainstorm, XCMG has incorporated cutting-edge technology in the world, enhanced the whole supply chain and completed data gathering and tracking on the dealers and clients all over the country. In this must-win trench-warfare, XCMG accomplished the reinforcement and breakthrough on the loader market with its profounding understanding in the products, technologies, services and industrial chain in the face of the multidimentional transitions pf the industry.

Running an business is nothing more than conducting the R & Ds, manufacturing and sales. Basically speaking, it tries the firm if it can make the right judgment and have the right understanding of the industrial and market trend. The success of a product or market share elevation is never attributable to a temporary move.

In 1989, XCMG came into being based on “one Institute and three plants” with one of the core plants being Xuzhou Loading Machinery Plant. Since then, XCMG has engaged in the most challenging and changing section of China’s construction machinery industry -- loader manufacturing. Although XCMG’s 30-year experience might not be quite dazzling since the successful production of the first loader in China, the 60 years of development of heavy machinery of the world renown and China’s only winner of several top technological honors makes the XCMG system a high quality and well-developed technological platform for the development of the loader manufacturing operation. Against such a background, XCMG is destined to be extraordinary in accomplishing its transformation, makeover and great leap forward.

Large Tonnage Loader
Different from most Chinese loader manufacturers mainly focusing on small and medium-tonnage products, XCMG has engaged in large-tonnage equipment since entering the loader making. having been accumulating large-tonnage loader R&D and manufacturing capacity constantly. In the beginning of the current century, as the external conditions and internal capabilities were getting mature and ripe, XCMG officially put large-tonnage loader R&D and technological renovation on the agenda. The loader industry at the time fell into vicious competition due to the low threshold and glut of similar products. The industry was in waiting for a participant of substantive innovative capability to overhaul the situation of the competition.

Mr. Ma Zhu, Deputy Manager of XCMG Science & Technology, asserted, “The market competition centering around the price will turn into a high-end technology oriented game sooner or later, which will be the direction of the industry development in the future. Such conclusion on the route of the industry’s growth and maturity has long been XCMG’s consensus from the top to the bottoml.

Since 2008, XCMG has increased R&D input continuously, made changes in the research mode by enhancing the R&D team in conducting a centralized large-tonnage loader manufacturing development. “Before uncertainties of achievement and revenues, such a tremendous investment even made us R&D staff scared,” said Ma Zhu who is concurrently XCMG’s technology center director and loader technology R&D team leader. He has the biggest say comparing with anyone else who wentthrough the arduous large-tonnage loader R&D way that no one was sure of its destination. At such a difficult moment, the XCMG leaders pointed to a clear development direction of sparing no efforts in overcoming the technical problems. This decision opened up the road to glories. With full support to the technology center from the entire corporation, the R&D team stepped onto a brand-new and broader platform.

In order to reach advanced international manufacturing standard, XCMG invested over RMB 10 billion in succession, conducting technology renovation on the existing loader manufacturing base by introducing the most advanced equipment, improving assembly technology to realize full-line production. For many years, the Chinese loader industry competition wass limited to small & medium-tonnage models, with the price and profitability on the shrinking. Every tiny change in the international exchange rate would “eat up” the painstakingly earned profit of a firm in the whole year. Regarded as an “bottomless abyss” seeing only inputs without outputs, few loader manufacturers are willing to “tighten the belt” to go into fundamental researches..

In the 4 years’ R&D process, the key point to success to be noted is the support from the clients. Previously, there was not even one single domestically made large-tonnage loader serving steaily at large scale mining projects and harbors especially in China. That was not only because of the high technical difficulty, the fact that few domestic enterprises had such manufacturing capability, but also some other reasons. No domestically manufactured large-tonnage loader could stand the test of working 24 hours continuously. The clients lacked the trust or faith in domestic brands. In the eyes of XCMG’s R&D staff, the key to producing reliable equipment is to acquire experiences. Problems of products occurring in the actual working environment may provide precious lessons to the manufacturer. And solutions to such problems can never be found in the lab. Just because of that, client support carries meaningful importance in breaking through the technological bottleneck of large-tonnage loader.

In 2011, XCMG achieved repeated breakthroughs in the application of large loader technologies and products for harbor and mining uses. From that point up to May 2012, XCMG loader’s market share has climbed rapidly up to 10%. XCMG is leading the Chinese loader manufacturing industry by winning a phased success on the high-end product market. With its large-tonnage loader, XCMG has broken up the monopoly of the foreign brands, being the first domestic choice. Marching towards the next target, XCMG is dedicated to making every of its large-tonnage loader the clients’ first choice.

The Energy-saving Battle
A chief manager from a globally renown construction machinery manufactuer says, “We are part of the problem and also the solution.” As early as the 1970s, some engineering machinery enterprise in the world began devoting to energy-saving product R&D. Not merely due to the rapid deterioration of environment, the more important reason was that large scale economic development construction and environment protection had become a hard to solve contradiction, with high emission of the engineering machinery the most denounced. With the signing of Kyoto Protocol, the worldwide efforts in seeking energy-saving and emission reduction began. This wave of action reached a climax at the 2011 Durban Climate Change Conference. The world engineering machinery players’ pursuit for and achievements in energy-saving technologies made the Chinese loader manufacturers feel the urgency and difficulties in such a battle.

With rich experiences in heavy equipment production and high-level platform and starting point for large-tonnage loader manufacturing, XCMG yet had to almost start from scratch in energy-saving and environmental friendly loader R&D.

Analyzing the global technological path and solutions to loader emission and energy-saving issues, XCMG divided its energy-saving loaders into 3 models: Reconfiguration of the low-speed engine for loaders of domestic uses, LNG technology development & application and hybrid engine research. Based on the near-term value to the end-users, XCMG chose the first two models. In the low-speed loader R&D, XCMG research team has redesigned and re-matched the converter, gear-box, driving axle, radiator, and hydraulic circuit and carried out tests on the whole machine. By lowering the engine speed, energy consumption is reduced with improved operation efficiency.

Following round after round of testings and improvements, , XCMG’s 5-ton low-speed loader was last recorded to run at the speed of 2000rmp against the previous 2200rmp and reached a 8-10% energy-saving rate. Currently, XCMG applies the low-speed technology on all series of 5-ton loaders, once again taking the lead in energy-saving technology application in China’s construction machinery industry.

In another type of energy-saving technology R&D, XCMG has gone further in steadier steps. In 2010, XCMG took the lead in launching the LNG driven loader – LW500K-LNG, which has aroused wide attentions through open demonstrations and is constantly copied and imitated by other manufacturers in the industry. A favorable momentum of development is emerging in China now. By analyzing the actual data of client uses, the LNG technology can be 30% cost effective as compared to loader of diesel engine. In some regions, such a difference is even as high as 42.8%.

The loader main engine industry and internal-combustion engine industry have different understandings in the adoption of LNG or CNG for loader powering. Different from CNG choosing manufacturers, XCMG has firmly taken for LNG, which has turned out to be the right choice in practice. LNG is the abbreviation for liquid natural gas. Once a firm is in control of such a technology and applies it to the loader, the fuel tank volume can be reduced to 1/3 of a CNG loader while the inflatability can be 8 times of that of the latter. The more important thing is that natural gas can be used safer and more reliably through liquidization.

Though LNG technology has more advantages than CNG, only the devoted R&D team could feel the pressures in the exploration process. From a general idea to an overall plan and then to marketing, the R&D team has been blessed with a lot of good advices from the clients for improvements. Even for such small details as whether to install a small lifting device under the fuel tank or equip a single or double bottle on the loader, the R&D team would not arrive at conclusions until repeated verifications and rounds of experiments. In addition, to ensure the safety of gas bottle, XCMG conducted a 3g acceleration vibration test as well as fire and falling tests. With the purpose of bringing more value and cost saving for the clients, the R&D team has pursued perfection and precision in every detail, component and material.

Now, XCMG is ready to storm a new technical target ---- applying new energy technology on the large-tonnage loader. XCMG believe that once the new proportioned fuel-saving technology is applied to the large-tonnage loader, it will bring about considerable value to the clients.

Component Highland
The succesful marketing of the large-tonnage and energy-saving LNG loaders has brought XCMG’s loader making operation into an entirely new prospect. The advancements have secured XCMG’s foremost position in the industry on the high-end market and new energy technology application. The strategic successes in the researches are not only found in the large-tonnage and LNG technology but also in “the development of key components.In the process of key component development, we experienced genuine breakthroughs.” says Ma Zhu.

For many years, key compenents had been a nightmare to the Chinese construction machinery manufacturers. Impeded by the basic industry’s backwardness in the processing equipment, casting, materials and standards, and continued failures in the hydraulic and driving systme development, the domestic manufacturers had long suffered from profit loss to the international manufacturers.

In the technological renovation items of the loader making industry and on the Ministry of Industry & Information Technology list, the gear-box and driving axle of the transmission system were still the 1970s’ model, very backward comparing with the current world main-stream technology. Due to the low-quality transmission system, there was a great gap in the engine modeling, energy consumption, operational comfortability, efficiency and environmental soundness that affected the exports. Thus, to truly improve the loader, there had to be breakthroughs in the wire-driven gear-box and wet driving axle technologies, which became one of XCMG’s major technological renovation projects.

To our joy, XCMG’s R&D team has lived up to the expectation which eventually made a true breakthrough in the transmission technology. Currently, the self-developed gear-box and wet driving axle by XCMG have been put on the 5-ton and 6-ton loaders. Having proved by harsh working conditions and seen further improvements, the breakthrough technology has completely replaced the imported products. Being as advanced as a certain world famous brand, the newly developed gear box and driving axles are assembled on the export-oriented and mining-oriented models. These XCMG technologies have done away with the traditional shortcomings of the domestically made problematic and short-lived gear-boxes. After long time of onboard tests, the average initial trouble-free operation time is over 8000 hours. It is the most substantive breakthrough in key technology and also the first to obtain intellectual property right in China and put it in use in mass production for a domestic loader manufacturer to date.

Being not contented with the achievements made thus far. “The energy application of the independent constant flow pump technology on the existing working and converting hydraulic system is unreasonable and needs be addressed. On the next stage, XCMG will make efforts in optimizing and improving the hydraulic technology for energy saving. Mr. Ma Zhu has a long-conceived plan for that, saying ”The Chinese loader manufacturers will complete a round of worshipping, catching up with and overtaking the world leading technologies. But the basis for all that depends on our own manufacturing capability of the key components. Only by independent-manufacturing can we make all our technological dreams to come true.”

XCMG aims to make itself into into a globe leading technology provider and corporation in terms of global industrial standard making, trend setting and leading as well as value realization. The China made loaders need to out into the world in every aspect. In such a process, this industry needs not only the courage to face up to the competitors, but also, more importantly, a world changing approach and capability
.
In 2011, XCMG achieved over RMB 87 billion revenues, ranking 5th. in global construction machinery manufacturers and continuing heading the domestic construction machine making industry. As a leader in terms of production scale, comprehensive competitiveness and brand influence, every step forward in the formulating of its R & D system or marketing strategies, to China and the world at large, will be a plus to achieving the goal of making XCMG into a “world class corporation of one hundred billion revenues” to secure its position as China’s number one as well as a world leader.