Lack of technology to produce key components is another challenge on its way to becoming a world-class company.

Currently, hydraulic parts are purchased from Japan, the power train from Europe and engines from Cummins Inc, a Chinese engine maker.

But the situation is changing slowly. Earlier this year, Liugong partnered with Cummins to build an engine company in Liuzhou, which will begin operations next year. The total investment amounts to 1.65 billion yuan.

Exporting products is the first step and Liugong machinery is seeking cooperation in various forms. In 2009, the company established a complete knock-down company in India, and earlier this year, it acquired Polish bulldozer company Huta Stalowa Wola SA to supply clients in eastern and southern Europe.

The complete knock-down form is just temporary, said Qin. "Liugong machinery eventually needs to operate locally in the target markets," he said.

"Back in the 1990s, the foreign governments welcomed us building complete knock down plants and assembling machines in their countries, but now they expect much more from us. We have to create jobs and help to build the supply chain for them."

Huang Ziqiang, deputy general manager of Liuzhou Motor, said companies need support from the Chinese government when exploring overseas markets.

"The Chinese government is offering duty refunds for export companies, but that's not what companies need the most," he said. "I wish the government could provide more legal services to us, so that we can get around various barriers and settle down in the target markets."

Huang Feifei in Nanning contributed to this story.

Contact the writers at [email protected] and [email protected]

 

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