GJJ plans massive supply chain, production plant in Tianjin
By Murray Pollok10 June 2009
The new facility is a joint venture between GJJ and six of its key component suppliers. The companies will together invest RMB 800 million (€80 million) - GJJ will fund half of that sum - to develop the 360000 m2 site to manufacture hoists and hoist-related components such as motors, rack and pinions and safety devices.
This project follows a RMB 200 million (€20 million) investment in a 50000 m2 hoist and tower crane factory in Xian, central China, which started operation in the middle of last year and is now in full production.
GJJ's founder and majority owner, Mr Wang Hua Long, speaking to AI at the company's head office in Guangzhou, southern China, said the investment was necessary to provide capacity for China's still-growing market, as well as the company's planned export expansion.
GJJ already has two production facilities in Guangzhou, a tower crane plant in Changsha, and the new Xian factory. Mr Wang said the Xian facility would also be well located to serve the growing market in western China.
"The Xian area is a new economic development zone and will grow like Guangzhou did five years ago", said Mr Wang.
GJJ is fortunate in having a still relatively buoyant domestic market. Exports by the company - particularly hoists - have become important over the past five years, reaching around half of all its RMB 780 million (€78 million) sales last year. However, Mr Wang said the fall in export markets like the US, Canada and Australia would mean that domestic sales would represent closer to 70% of sales this year.
Mr Wang said that the Chinese market did start to slow down in September because of general lack of confidence following the financial crisis, but that sales had started again, in part thanks to the Chinese government's stimulation package and continued investment in infrastructure projects.
He said the additional capacity provided by the Xian plant - which will make 150 tower cranes and 400 hoists this year - could increase turnover in 2009 to RMB 1 billion (€100 million). "I think we can do it. The new factory will allow us to sell tower cranes worth RMB 250 million (€25 million) this year, and we could produce 1500 hoists."