DEVELON

On October 26th, Doosan Infracore held the ceremony for completion of the 2nd production base established in Suzhou, Jiangsu, China, and announced the beginning of the production of small excavators in China. The Suzhou plant will mainly deal with the rapidly increasing demand for small excavators. With its two top system, the plant will target the Chinese excavator market together with the Yantai plant in Shandong, which mainly produces medium and large-sized excavators.

In terms of gross area, the Suzhou plant is 240,000㎡ in size. Since 2007, Doosan Infracore’s Chinese subsidiaries, DICI (25%) and DICC (75%), have invested 72.9 billion KRW to complete the construction of the plant. Th plant will produce 9,800 excavators under 8 tons every year. Doosan Infracore plans to undertake the second stage of plant expansion and have it completed by 2015 to increase production to 13,600 excavators.

The reasons why Doosan Infracore constructed the 2nd production base in China is as follows: i) to deal with the rapidly growing small excavator market in China; ii) to target China’s southern region; and iii) to secure price competitiveness through reducing the distribution costs and production costs. The Chinese small excavator market has recorded an annual average growth of 34% over the past five years. The small excavators accounted for about 33% of the Chinese excavator market in 2010. In accordance with the Chinese government’s implementation of the urbanization project and its new rural development policy, 10% annual growth is expected in the small excavator market in the coming years.

Along with the Yantai plant, which has the number one accumulated sales in the excavator market in China, Doosan Infracore plans to strengthen its position in the Chinese market and the global market through its two top system. The strategy is to focus on the specialization of the industry by having the Suzhou plant focus on small excavators, while the Yantai plant focuses on medium and large-sized excavators.

As a high tech industrial area in China, the Suzhou region has a highly developed land and sea transportation infrastructure. Also, since it is close to China’s southern region, which has the largest demand for small excavators, it will also help reducing distribution costs. The suppliers are also concentrated in the neighboring areas of Suzhou, which is expected to ensure price and quality competitiveness by establishing a stable supply chain.

Many important guests attended the ceremony, including the President and Chairman of Doosan Group, Yong Hyun Park; the President and CEO of Doosan Infracore, Yong Sung Kim; the President of Doosan Infracore’s Construction Equipment BG, Tony Helsham; the Consul General at Shanghai, Chong Gi An; the Premier of the Suzhou Political Consultative Conference, Jinhua Wang; and the Vice Mayor of the Suzhou Industrial Park Management Committee, Zhiping Yang.

Doosan Infracore ranked number one for seven consecutive years in the customer satisfaction survey conducted by the ‘Customer Satisfaction Survey Organizing Committee for the Chinese Market Brand’.