A number of measures in the equipment manufacturing revitalization plan were made public on the 4th of this month. The plan proposes to upgrade the technical level of large-scale castings and forgings and related components. It is widely believed in the industry that the manufacture of basic parts and core components will be rapidly supported by policy support.
Generally, there are three development paths for domestic mechanical components.
The first is to choose a joint venture. A person from the domestic construction machinery industry giant Liugong told the “First Financial Daily†that in 1995 the company established a joint venture called Liuzhou ZF Machinery Co., Ltd. to produce transmission equipment for loaders such as gearboxes. And brake drive axles, etc. At that time, the ratio of Chinese and foreign shareholders was 49% and 51%. The current production situation is very good. Last year, sales were about 370 million yuan and profits were 100 million yuan. The reason for the hot sales is that the equipment is advanced. Almost all export loaders must use this product, and the bargaining power of enterprises is extremely strong.
However, the joint venture does not necessarily lead to the acquisition of key technologies. The foreign companies have given the Chinese side a rare opportunity to hand over the mechanical and technological achievements of many years of painstaking research. Moreover, under the pattern that many technologies have been monopolized, overseas companies will not import technology into China.
The second way is for Chinese companies to improve their technological capabilities by mastering the controlling stake in overseas factories. Such examples include the acquisition of Italian CIFA by Zoomlion, the acquisition of Waldsi Coburg of Germany by Beijing No. 1 Machine Tool Plant, and the acquisition of Hess of Germany by Shenyang Machine Tool Group. However, the Chinese company that has acquired the company must develop after years of development and have the necessary funds and management experience to make it happen.
Third, it relies on independent research and development. At present, Taiyuan Heavy Industry, which specializes in the manufacture of mining equipment, Jianghuai Power, which develops engine parts, Tianma, which produces bearings, and Axis Research, are constantly investing in the research and development of basic parts with technical content.
In addition to some companies specializing in parts and components, the whole machine manufacturing company will also focus on the production of core components. Because the development of the basic components is not only related to the reduction of the procurement cost of the whole machine, but also reflected in other aspects.
After the high-end technology manufacturing of the basic parts is put in the country, the large equipment and technology for the parts will gradually mature. For example, after Liugong introduced the “transmission box†company from overseas and joint venture production, some domestic castings and heat treatment technologies for the gearbox were also fully developed.
Secondly, the supporting basic parts of the whole machine enterprise can help the company reduce inventory and capital occupation. The period of important foreign imported parts is long. The management of a company told the “First Financial Daily†that the Cummins imported engine used by them will take 5 to 6 months from the time of placing the order to the factory. The Chinese machine company must play in advance. In order to get the equipment for assembly. After the sudden financial crisis last year, some domestic machinery manufacturers saw a large inventory backlog in the second half of the year, and the funds were difficult to turn around. Part of the reason was that the supply cycle of core components was too long.
If these products can be developed in China, it is easier for companies to make production plans instead of passively accepting the negative impact of the financial crisis.
However, the ability to get high-end core component technology is not something that can be done overnight. This is like the TV LCD technology of the IT industry and the home appliance industry. The “technology transfer†that relies on foreign giants will only make Chinese companies go astray.
Only the process of accelerating independent research and development is one of the ideas of the government to launch this revitalization plan. Companies also want preferential tax, financial subsidies and other incentives to reduce the cycle of independent research and development.
Generally, there are three development paths for domestic mechanical components.
The first is to choose a joint venture. A person from the domestic construction machinery industry giant Liugong told the “First Financial Daily†that in 1995 the company established a joint venture called Liuzhou ZF Machinery Co., Ltd. to produce transmission equipment for loaders such as gearboxes. And brake drive axles, etc. At that time, the ratio of Chinese and foreign shareholders was 49% and 51%. The current production situation is very good. Last year, sales were about 370 million yuan and profits were 100 million yuan. The reason for the hot sales is that the equipment is advanced. Almost all export loaders must use this product, and the bargaining power of enterprises is extremely strong.
However, the joint venture does not necessarily lead to the acquisition of key technologies. The foreign companies have given the Chinese side a rare opportunity to hand over the mechanical and technological achievements of many years of painstaking research. Moreover, under the pattern that many technologies have been monopolized, overseas companies will not import technology into China.
The second way is for Chinese companies to improve their technological capabilities by mastering the controlling stake in overseas factories. Such examples include the acquisition of Italian CIFA by Zoomlion, the acquisition of Waldsi Coburg of Germany by Beijing No. 1 Machine Tool Plant, and the acquisition of Hess of Germany by Shenyang Machine Tool Group. However, the Chinese company that has acquired the company must develop after years of development and have the necessary funds and management experience to make it happen.
Third, it relies on independent research and development. At present, Taiyuan Heavy Industry, which specializes in the manufacture of mining equipment, Jianghuai Power, which develops engine parts, Tianma, which produces bearings, and Axis Research, are constantly investing in the research and development of basic parts with technical content.
In addition to some companies specializing in parts and components, the whole machine manufacturing company will also focus on the production of core components. Because the development of the basic components is not only related to the reduction of the procurement cost of the whole machine, but also reflected in other aspects.
After the high-end technology manufacturing of the basic parts is put in the country, the large equipment and technology for the parts will gradually mature. For example, after Liugong introduced the “transmission box†company from overseas and joint venture production, some domestic castings and heat treatment technologies for the gearbox were also fully developed.
Secondly, the supporting basic parts of the whole machine enterprise can help the company reduce inventory and capital occupation. The period of important foreign imported parts is long. The management of a company told the “First Financial Daily†that the Cummins imported engine used by them will take 5 to 6 months from the time of placing the order to the factory. The Chinese machine company must play in advance. In order to get the equipment for assembly. After the sudden financial crisis last year, some domestic machinery manufacturers saw a large inventory backlog in the second half of the year, and the funds were difficult to turn around. Part of the reason was that the supply cycle of core components was too long.
If these products can be developed in China, it is easier for companies to make production plans instead of passively accepting the negative impact of the financial crisis.
However, the ability to get high-end core component technology is not something that can be done overnight. This is like the TV LCD technology of the IT industry and the home appliance industry. The “technology transfer†that relies on foreign giants will only make Chinese companies go astray.
Only the process of accelerating independent research and development is one of the ideas of the government to launch this revitalization plan. Companies also want preferential tax, financial subsidies and other incentives to reduce the cycle of independent research and development.
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