Chinese breaker OEM invests in export growth

Weili Chen, general manager of Daekko, pictured at Bauma China. (PHOTO: D&Ri/KHL Group)

Weili Chen, the company’s general manager, speaking to D&Ri at the Bauma China show at the end of November, said the company had been exporting for the past few years, in particular to the Middle East, Africa, Russia and the central Asian republics.

“Our overseas business is increasing every month”, he said, “We have dealers in Saudi Arabia and Moscow, and we are now registering a company in Dubai.”

He said the aim was to buy land in Dubai and create an assembly facility for export to India and other markets.

The Dubai location will help Daekko to avoid import tariffs on Chinese-made breakers imposed by India, South Korea and Japan.

Chen said the company would rent a facility to start with – which could be up and running within months – with a dedicated Daekko-owned facility being the ultimate aim.

Daekko’s new DHS-280 shear pictured at Bauma China.(PHOTO: D&Ri/KHL Group)

The investment in Dubai is part of a wider expansion plan at the company, with a new factory in its home city of Wenling, Zhejiang province, scheduled to open in April next year.

The new factory will cover an area of 140,000 sq m and will add to the company’s existing 30,000 sq m location, which it will retain.

Chen, who took over the management of the business from his father nine years ago, said the new plant represented an investment of RMB400 million, which is more than US$55 million.

Daekko also has Europe in its sights: “We have some potential dealers in Europe”, said Chen, “We are trying to collaborate next year.”

He said he was talking to companies in Germany and Switzerland.

The company’s main product range is breakers and hammers, but at Bauma China it showed a new double-cylinder hydraulic shear, the DHS-280, a 2600 kg model suitable for a 20-30 t excavator carrier.

The DHS range starts at the 330 kg DHS-040 model and goes up to the DHS-380, a 3850 kg shear for 33-40 t carriers.

China’s construction OEMs have made strides. Should western firms worry? China used to be a lucrative market for western construction equipment manufacturers. But the world is changing.