LiuGong digs African growth prospects
One of LiuGong’s key focus areas is developing bigger machines for mining-related applications.
Leveraging on its extended dealer footprint across the African continent, Chinese original equipment manufacturer LiuGong believes it is ready to conquer new market segments such as mining.
“Africa for us is a very important market. It is our biggest market outside of China. We have a strong presence in a number of strategic markets on the continent,” says David Beatenbough, LiuGong vice-president.
He believes the company’s biggest potential is probably still South Africa. However, the Chinese OEM reports strong growth in Ethiopia and some countries in North Africa. “But, I reckon the untapped potential remains in southern Africa,” he adds.
The African continent constitutes about 20% of LiuGong’s export market, making it the biggest outside China. “It is definitely of strategic significance to us, considering that LiuGong now holds about 14,7% market share across the African equipment sector,” says Beatenbough.
Beatenbough believes that there are two fundamental things to further grow the market. “Firstly you are as good as your dealer; you need to have the right partner to look after the brand,” he says. “Secondly, having the right support structure is of essence. The right support means appropriate infrastructure, parts support and technicality to service the machines. As a result, in 2011 we set up a subsidiary in South Africa to look after our regional interests. In addition to this investment, we also invested in a spare parts facility in the country to improve backup support.”
The company also has advanced plans to establish two research and development facilities on the continent, one in South Africa, and the other in North Africa. These will be implemented in the next five years.
LiuGong has between 25 and 30 dealers across the continent and is constantly looking at ways to grow the footprint when need arises, according to Beatenbough.
Apart from its traditional construction equipment business, Beatenbough says one of LiuGong’s key focus areas is developing bigger machines for mining-related applications. The company has set the ball rolling with its bigger machines such as the 70t mining excavator and 50t wheel loader.
Speaking of bigger machinery for the mining sector, Beatenbough believes the company’s offerings are geared enough to work the 24/7 demanding nature of this sector. “I am pretty confident about having our gear working in the arduous mining conditions. Some of these big machines we have recently launched have gone under rigorous field trials in China,” he says.
“The distribution methods for mining equipment are more difficult and more of a concern than the product right now. Distribution and product support are areas where we continually work to improve ourselves, but, overall I think we are ready to go down that path,” he adds.
Equipment Africa says: One of LiuGong’s key focus areas is developing bigger machines for mining related applications. It is also worthwhile to note that Dressta, acquired by Liugong in 2012, gives the Chinese OEM the edge with its mining dozer range. The two brands complement each other very well in this unforgiving sector.