The 26th of October 2021 was a momentous day for Doosan Infracore as the manufacturer held a ceremony on the account of completing the manufacturing facility in Suzhou is completed. The completion of the plant automatically pushed Doosan into a leading position within the spectrum of the Chinese small market due to the lower cost of producing these machines in the Suzhou plant.
The plant in Suzhou, Jiangsu, China announced that the production of small excavators in China has been officially initiated in this plant providing Doosan with adequate competitive advantage in the form of price leadership. The Suzhou plant focuses on the rapidly rising demand for small excavator hire services as China shifts its infrastructure gear into high in the aftermath of COVID 19 which has impacted the entire heavy machine industry. Both the Suzhou plant and the Yantai plant which rolls out medium and large excavators will specifically target not just the Chinese excavator market, but also other emerging markets in the Asian region.
According to details obtain during the ceremony the Suzhou plant encompasses an approximate area of about 240,000㎡. Doosan Infracore subsidiaries DICI and DICC have invested 25 % and 75 % respectively amounting to 72.9 billion in the construction of the plant. The newly plant has the capacity to produce approximately 10,000 excavator units which is expected the demands of the current market conditions. The plants second installation will increase the production capacity by an additional 4,000 units. The strategic move by Doosan was a proactive business decision based on the opinions of market observer. China has been on a ‘rapid progress’ mode for over a decade and its momentum has not dampened even in the wake of the COVID 10 pandemic.
The entire initiative would enable Doosan Infracore to not just capture the rapidly expanding mini excavator market, but also achieve price leadership within the southern region of China. Price advantage via lowering distribution and production costs will assist the company securing the currently observed annual 34% average growth that has been consistent for five consecutive years. From the total 34 % of the excavator market growth, mini excavators accounted for 33% of the entire Chinese excavator market that has been on a climb since 2010.
Most of the demand has been driven by the republic’s government’s urbanization project that focuses on rural related policies that has been ongoing for over a decade. A 10% annual growth rate is still expected within the spectrum of the mini excavator rental market over the next few years. Doosan has been observed to be strengthening its position in the Chinese market gradually by placing focus on the niche aspects of the industry and the Suzhou plant is a bold, but low risk move that would dominate the supply chain.
Among those who attended the event included the Chairman of Doosan Group, Yong Hyun Park, Doosan Infracore’s Construction Equipment president, the CEO of Doosan Infracore, Yong Sung Kim, and Zhiping Yang who is the Vice Mayor of the Suzhou Industrial Park Management Committee.