Industry interview: Sany builds towards a sustainable future
By Andy Brown26 July 2021
The Sany Heavy Machinery (Excavator) president talks to Andy Brown about global excavator sales, electric equipment, autonomy and the company’s global ambitions.
Sany is one of the world’s leading construction equipment manufacturers – no.4 on the most recent Yellow Table, International Construction’s ranking of the world’s biggest OEMs by sales – with excavators the most globally-purchased construction machinery.
When the offer came in to interview Yu Hong Fu, who heads up Sany’s worldwide excavator division as chairman and president, it was not exactly a difficult decision to make despite the fact that an interpreter would be required.
Mr Yu was friendly, taking the time at the end of the interview to discuss football as well as the relative merits of the English and Chinese soccer leagues respectively.
And he had good reason to be in such a positive mood, as the Sany excavator division last year registered record sales of over 98,000 units. Around 90 per cent of sales were from China, but MrYu said that growing sales in overseas markets was a key area for the business.
He explained, “In overseas markets, excluding China, Sany has increased sales 80% compared to previous years. The number one overseas market for Sany is India, and for the US and European countries business has also been going very well.”
This increase of 80% is obviously substantial growth, but it does come from a relatively low level. He estimates that the overall contribution of overseas sales to the Sany Group is only around 10%.
Mr Yu added, “In order to be a globalised leading company we have to increase our sales from our overseas markets.
“Our product has become more popular and more accepted from customers from overseas markets. To make good quality products has been our foundation, this is our base for everything.”
Focus on growing global expansion
The company is a market leader in overseas territories such as Indonesia and Thailand. He revealed that there are four strategic markets that the company is targeting, namely Australia, Europe, Japan and North America.
Challenges in being a global company and increasing sales in markets all over the world include adapting machines to numerous different emissions regulations and meeting a market’s customer demand. What customers want in the UAE will be subtly different to what they desire in Argentina, Canada and/or Germany for example.
Mr Yu said, “The customer demands in different countries and regions around the world is varied. All Sany can do is use our strong R&D capabilities to meet these different requirements from all over the world.
“We like to provide products with various options for customers, so that they can choose what they want to meet their specific demands for different applications.”
While it is undoubtedly true that for Sany to fulfil its stratospheric ambitions their sales need to increase in markets all across the globe. However, the company could be forgiven for focusing on China, given that the firm’s domestic market is the world’s biggest for construction equipment sales.
In 2020, when the rest of the world saw declining sales, sales in China increased from what was already a strong market in 2019.
Machines lined up to replace people as construction booms
There are fears that construction in China will suffer a decline from its current dizzying heights. The country has suffered substantial lows following big highs before, but the current expectation is that any decline will be smoother than what we saw before.
Mr Yu is confident about the market and stated, “In the next few years it is undoubtable that the Chinese market will remain a very big market. In China it has been a trend that the machine is becoming more and more popular to replace people.”
This is a trend in China, and indeed in other regions across the globe.
Mr Yu explained, “For the past decade the main focus was to make our machines more durable and reliable, this is a key factor. But now it is very important to make our machines smart.
“The whole R&D team from Sany has been spending a lot of effort on this, how to make advanced excavators and how to apply more telematics on machines to make them smarter.
“We have also put a lot of effort into producing purely electric machines and autonomous machines. In developed markets you will soon see the electric and autonomous excavators.”
The head of Sany’s excavator division claims that the company already has “in its pocket” the technology for autonomous drive excavators. However, it is more a question of how it will be applied, as well as defining the correct price point and value for customers.
Targeting China’s ‘30·60’ decarbonisation goal
Arguably one of the world’s mega trends, probably the mega trend, is sustainability. With the Chinese government pushing this issue, Chinese equipment manufacturers could be well placed to play a key role in developing the electric equipment that will surely only grow in popularity.
Mr Yu refers to the Chinese government’s ‘30-60’ decarbonisation policy as being a key driver behind companies investing more time, money and resources in electric equipment.
The policy can be summarised as the country committing to hit peak carbon emissions by 2030 before they decline, and China reaches carbon neutrality by 2060.
With the nation currently the world’s largest carbon emitter, real change – seismic change – needs to take place for this to happen. This is one of the reasons why the government is prioritising and pushing electric power.
The electric car market is substantial in China. Around 1.3 million electric cars were sold, roughly 40% of the total global market, in 2020.
Mr Yu added, “For electric products we have a very strong foundation in China to build this type of machine. The electric power industry in China has good foundations.
“The car industry in China has given us a lot of support, so we are working closely with the car industry and looking at their development.”
Looking to the near future, he claims that – as in many markets around the world – there is a shortage of skilled operators in China, and that next year Sany will be launching a range of products to make the job easier for operators. This will include Artificial Intelligence (AI), which learns the operator’s habits and helps them pick the right option.
Further ahead in the future, Mr Yu said that the company envisages connected construction jobsites where machines talk to each other and work autonomously, although that remains some time away from becoming a reality.
Mr Yu concluded, “For autonomous and electric excavators it is undoubtable that this is the trend. The whole industry is heading in this direction, but to what extent we need time to see.”
It is certainly the direction of travel, and one where the rate of progress seems to be rapidly accelerating.