CHINA: LiuGong open new subsidiaries and positive 3rd quarter figures

LiuGong Machinery Corp. announced the opening of three new subsidiary companies as it continues its rapid global growth. The subsidiary office headquarters will open in Singapore, Johannesburg and Dubai.

Each will house the sales and marketing functions, engineering, logistics, importing, accounting, dealer support and dealer training, along with executive management. Each also will include the start-up of sophisticated parts depots where LiuGong will import and keep inventory of machines and spare parts. The depots support shipments of spare parts to any portion of each region within 48 hours, enhancing customer service.

The new subsidiaries are a continuation of the steady expansion LiuGong has undertaken for the past five years. The most recent, the opening of a European subsidiary office, was announced earlier this year at Bauma, Munich. LiuGong opens subsidiary offices in markets it plans to aggressively pursue. These three newest subsidiaries follow a successful strategy that has enabled LiuGong to become among the top 25 largest heavy equipment manufacturers in the world.

LiuGong is already active in Indonesia, South Africa and the Middle East, with dealers in each, but the expansion allows the company even better reach to customers. Each office debut will be followed by heavy recruitment for additional well-capitalized, high quality dealers.

LiuGong Asia Pacific PTE. Ltd., opens its doors in coming weeks, and has 4,000 square meters of office space. It is a ¥6.6 million, (US$1 million, €734,000) investment for the company. Mr. Li Dongchun has been named general manager and will lead a team of 10 Chinese and Malaysian professionals.

LiuGong Machinery South Africa PTY is expected to become fully operational in early 2011. It will include 4,500 square meters of office space for support personnel, and the parts depot. It represents a ¥31 million (US$4.7 million, €3.4 million) investment for the company. Mr. Zhu Xionbing has been named general manager and will lead a team of 10 Chinese and South African professionals. The headquarters will serve African countries south of the Sahara Desert.

LiuGong Machinery Middle East FZE is expected to become fully operational in early 2011. It incorporates 1,000 square meters of office space and represents a ¥23 million (US$3.5 million, €2.5 million) investment for the company. Mr. Liang Yongjie has been named general manager and will lead a team of 20 Chinese and Arab professionals.

LiuGong Machinery Corp. is headquartered in Liuzhou, China, and offers a full line of machines including wheel loaders, excavators, rollers, motor graders, bulldozers, backhoes, skid steer loaders, mini excavators, forklifts, milling machines, pavers and cranes. LiuGong is the largest wheel loader manufacturer in the world.

Strong 3rd quarter 2010 figures

After announcing record sales, profits and export volumes the first half of this year, LiuGong executives reported the company’s third quarter earnings continue apace as the company posted total sales revenue of ¥ 11.75 billion (€1.29 billion, US$1.75 billion) a 61% increase from the same period in 2009.

With only a slight slowing in the overall pace of earnings from the first two quarters, LiuGong continues to break benchmarks from years’ previous, reporting net profit of ¥ 1.26 billion (€138 million, US$189 million) on total gross profits of ¥ 1.5 billion (€167 million, US$227 million). This represents a 122% increase from the same period last year. The company posted ¥ 1.94 (€21 cents, US$29 cents) in earnings per share, up from the ¥ 1.41 (€15 cents, US$21 cents) reported for the first six months of 2010.

Domestic sales volume rose to ¥ 11 billion (€1.20 billion, US$1.63 billion) a 62% increase from the same period in 2009, while overseas sales volume, the big growth segment for the company, was ¥ 834 million (€91 million, US$125 million) a nearly 48% increase from the same period last year. LiuGong 1,502 machines overseas during the third quarter, and over 11,589 machines within the domestic market, for a total of 13,091 units. Total machines sold so far this year domestically and overseas were 39,434 (91%) and 3,722 (9%) respectively.