African business drives truck maker into developed countries

Representatives of China National Heavy-Duty Truck Group Co and Africa's Dangote Group signed a $100-million deal on Wednesday for an assembly plant that is designed to produce 5,000 heavy-duty trucks a year in Lagos, Nigeria. Provided to China Daily

China National Heavy-Duty Truck Group Co signed a $100-million deal for a new assembly plant to produce trucks in Lagos, Nigeria.

The nation's leading heavy-duty truck maker hopes the project will give its business in Africa a further boost.[Special coverage]

The new knocked-down assembly line is a joint investment established by the Shandong-based company, also known as Sinotruk, and Africa's industrial giant Dangote Group.

When completed, the plant is expected to produce 5,000 heavy-duty trucks a year.

The deal is part of a raft of agreements due to be signed off between China and Africa during Chinese Premier Li Keqiang's visit to Ethiopia, Nigeria, Angola and Kenya from May 4 to 11. It is Li's first visit to Africa since taking office in 2013.

Li and Goodluck Ebele Jonathan, president of Nigeria, attended the deal signing ceremony in the Abuja Presidential Palace on Wednesday morning.

"The African market is one of the most significant parts of our 'go-global' strategy. We have long been committed to developing close business ties with our partners in the continent and contributing more to the economic growth of African countries," Ma Chunji, chairman of Sinotruk, told China Daily.

Backed by the China-Africa Development Fund, the new assembly plant will add a sharp competitive edge to Sinotruk by saving transport costs and also create more jobs for local workers and transfer skills to them, said Ma.

Established in 1956, Sinotruk was a pioneer in the development of heavy-duty truck manufacturing in China. The nation's first wholly self-manufactured heavy truck rolled off its assembly line in 1960.

The company's product portfolio includes heavy, middle and light-duty trucks, passenger cars, special purpose vehicles and construction machinery.

The product lineup for heavy-duty trucks alone has grown from one series and 78 models in 2001 to nine series and more than 3,000 models today.

Ma said the company has held the biggest share of the domestic heavy-duty trucks market for years.

The company exports products to more than 96 countries and regions and has six overseas branches, more than 400 service centers and 300 parts dealers across the world.

It secured export orders for more than 24,500 vehicles last year, making it the largest exporter of heavy trucks in the country for nine years in a row, according to the company.

"Acknowledged to be one of the fastest-growing regions in the world, Africa has long been the most important of our overseas markets," said Ma, noting that 40 of its 96 exporting markets are in Africa.

More than 32,000 vehicles were sold in African countries and regions since 2011.

Of these, more than 10,000 were in Nigeria, which has the largest economy and population in Africa.

The vehicles were well received by local customers and used in a wide range of sectors, including transportation, infrastructure construction, environmental protection, as well as defense equipment, Ma said.

Liu Wei, vice-general manager of Sinotruk, attributed the company's strong performance in Africa to its humanized and high-quality products, sound after-sales services and marketing strategies.

"Africa's regulations, climate and driving habits are different from those in China, so it is important for vehicle makers to make products that suit local conditions," Liu said.

"Our return on investment from Sinotruk vehicles has been excellent. The vehicles have performed exceedingly well on all parameters," said Edmund Okwu, general manager of Richbon Ltd Co, a Sinotruk dealer in Nigeria.

"Their products are made for African roads. They have an advantage over other companies because of lower prices, high performance, fuel efficiency and simpler maintenance procedures," he said.

Sinotruk has established a range of long-term business partners in Africa, one of which is the Nigerian-based Dangote Group, Africa's leading manufacturer and supplier of cement, steel and petroleum.

Aliko Dangote, founder and president of the group, is the richest man in Africa, according to the most recent annual ranking of the world's richest in Forbes magazine.Since partnering with Dangote group, Sinotruk has delivered more than 6,000 vehicles to the client.

Last July, the two companies signed a contract for the delivery of 1,700 heavy trucks and 1,700 semi-trailers, which are expected to be used to expand Dangote's extensive nationwide distribution network.

Sinotruk is expecting its performance in Africa to provide momentum for expansion into other developed markets like Europe and the US.

To achieve this aim, the company has built technical partnerships with major international brands including Steyr in Austria and Mann in Germany.

In 2009, Europe's leading heavy commercial vehicle maker MAN SE, owner of the Mann brand, bought a 25 percent share in Sinotruk Hong Kong and signed an agreement to transfer some advanced technologies to the Chinese truck maker.

By teaming up with MAN, Sinotruk has improved its own research and development capabilities, which helped the company penetrate key global markets.

The jointly developed product, the Sitrak series of heavy-duty truck, was launched last March and has become one of the company's best sellers.

"The new model is expected to rival foreign high-end brands in the domestic market and help Sinotruk extend its sales network to developed countries," said Zhang Xiaodong, general manager of the company's sales department.

The company's exports are expected to account for 20 percent of its total revenue in a few years, making it a top player in the sector worldwide, Zhang projected.