Engineering machinery, Lingong, China--Engineering machinery firms strive for energy efficiency

Engineering machinery makers will develop more energy-saving products as industry competition intensifies and the nation presses ahead with its focus on energy efficiency, analysts and industry experts said on Thursday.

"Energy-efficiency will be one of the key trends for domestic engineering machinery makers," said Guo Qiang, an analyst who tracks the machinery sector at Shenzhen-based First Capital Securities.

"As customers start paying more attention to fuel consumption costs, manufacturers will develop more energy-efficient machines to boost sales," he said.

Shandong Lingong Construction Machinery Co Ltd, China's fourth-largest producer of loaders, has been a pioneer in energy reduction. The company has achieved a 10 percent reduction in energy consumption and recently got a certificate for the same from the General Administration of Quality Supervision, Inspection and Quarantine.

"We are planning to lower usage costs and provide added value to our customers through energy-saving products having optimized transmission and hydraulic systems," said Chi Feng, research and development director of Shandong Lingong.

"We are also making efforts to launch loaders that have fuel efficiency of over 20 percent by next year," said Chi.

Swedish construction equipment provider Volvo Group holds a 70 percent stake in Shandong Lingong. The company launched its self-developed 10-percent energy-saving loader in August 2009 and has received a good response from the construction sector.

"Though our customers have to pay 3,000 yuan ($443) more for the loader, they can save around 20,000 to 30,000 yuan every year on fuel costs," said Chi.

The company sold 16,000 units in the first half of the year and reported revenue of 3.8 billion yuan for the period. The new product contributed to nearly half of the sales and represented a sizable sales jump as the company sold the same number of loaders in 2009.

According to Chi, a 5-ton homegrown loader, the most popular model in China's engineering machinery is priced around 300,000 yuan per unit and consumes 20 liters of diesel per hour. China has around 500,000 units of the 5-ton loaders in use todate.

"You can imagine how much of fuel can be saved by utilizing the 10-percent energy reduction model. The engineering machinery industry in China has a total capacity of 1.4 million units," said Chi.

Sources from the China Machinery Industry Federation said that apart from Shandong Lingong, other players like the Fujian-based Lonking Group and Guangxi-based Liugong Group are also developing energy-efficient engineering machines.

Source:China Daily