North American Special - Trenchless International
North American Special - Trenchless International
North American Special - Trenchless International
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SPECIAL FEATURE<br />
April 2009 - <strong>Trenchless</strong> <strong>International</strong><br />
Made in China<br />
by Kate Pemberton<br />
The global HDD market is a dynamic and expanding area. A new innovative market emerging from<br />
the east is set to challenge the dominance of the traditional manufacturers.<br />
The prolonged and extensive<br />
period of construction growth in China<br />
has enabled the country’s huge cities to<br />
modernise utilities such as water, wastewater,<br />
and telecommunications. Above<br />
ground construction has been achieved<br />
so rapidly that in many of China’s populous<br />
cities no-dig construction is the only<br />
practical method to install and repair the<br />
necessary supporting infrastructure.<br />
The use of HDD has been a factor in<br />
the development of a growing export<br />
market. Despite the slow down in China’s<br />
growth rates, the trenchless industry continues<br />
to gain momentum domestically.<br />
Chinese companies are finding success<br />
exporting machinery such as HDD rigs to<br />
the rest of the world.<br />
The HDD market<br />
In the past Chinese ‘knock-offs’ have<br />
been dismissed as unreliable, based on<br />
quality concerns. However, international<br />
partnerships, increased technological<br />
capability and lower costs are combining<br />
to create a market for the Chinese<br />
product.<br />
HDD Broker General Manager Bob<br />
Martin spoke to <strong>Trenchless</strong> <strong>International</strong><br />
regarding the international HDD market.<br />
Mr Martin said that historically the<br />
<strong>North</strong> <strong>American</strong> market has been unwilling<br />
to accept Chinese manufactured<br />
equipment. Mr Martin said “Even the<br />
Chinese do not readily accept their own<br />
equipment, acknowledging the quality<br />
shortcomings and instead opt for the<br />
much more expensive US-manufactured<br />
drills.”<br />
However, this situation is changing.<br />
The impact of the global financial crisis<br />
is reverberating around the world.<br />
Project managers are looking for ways to<br />
cut costs while still maintaining the high<br />
standards expected in the industry.<br />
The economic downturn is not the sole<br />
reason for the increase of exports of<br />
Chinese manufactured drills. Mr Martin<br />
said there has been a marked increase<br />
in the quality of the Chinese product.<br />
“Demand for cheaper, simpler machines<br />
is increasing at a very fast pace as<br />
the demand for work remains constant<br />
but the money available to purchase<br />
decreases,” he explained.<br />
Chinese rig manufacturers exhibiting<br />
at the Mosow <strong>International</strong> No-Dig<br />
2008.<br />
East meets west<br />
HDD rigs have been manufactured in<br />
China for over a decade. The Chinese<br />
domestic market has grown as people discover<br />
the benefits of trenchless solutions.<br />
Professional relationships between non-<br />
Chinese and Chinese companies have also<br />
encouraged an improvement in the quality<br />
and production capabilities of Chinese<br />
machinery manufacturers.<br />
Hanlyma, founded in 2003, is one of<br />
China’s leading manufacturers of HDD rigs.<br />
Hanlyma spokesperson Jerry Liang said<br />
that rapid growth and strong branding has<br />
culminated in the company supplying 30<br />
per cent of the domestic market.<br />
The first <strong>American</strong> HDD rig was imported<br />
into China in 1988. Ten years later the first<br />
Chinese rig was created. Mr Liang said<br />
that prior to 2003, 90 per cent of the HDD<br />
market was shared between prominent<br />
international companies including Vermeer,<br />
Ditch Witch and Case.<br />
Mr Liang said that over the last five years<br />
Chinese rigs have come to dominate the<br />
Chinese domestic market, accounting for<br />
almost 95 per cent of market share.<br />
There are currently more than 200 contractors<br />
engaged in trenchless construction<br />
in China, using more than 2,000 HDD rigs,<br />
approximately 700 of which were introduced<br />
in 2007 with the biggest HDD rig in<br />
the world now in China.<br />
As the quality of the rigs available has<br />
improved, Chinese companies have begun<br />
to find success on the global stage. Mr<br />
Liang said that Chinese HDD machines<br />
are well priced to compete in the international<br />
market with high quality technological<br />
capabilities. In 2008, Hanlyma exported<br />
112 rigs, or approximately 44 per cent of<br />
their product.<br />
Another concern levelled at Chinese<br />
HDD manufacturers in the past is a lack<br />
of after sales service. Hanylama is currently<br />
focused on increasing the quality of<br />
after sales service. To facilitate expansion<br />
and service capabilities, the company has<br />
sales and service centres in countries<br />
including Australia, Russia, India, Malaysia<br />
and Turkey. The feedback from international<br />
customers had been positive. Mr<br />
Liang said that customers were satisfied<br />
by the good performance and quality of<br />
the Chinese built machines and the level of<br />
service available.<br />
In addition, Chinese companies are now<br />
endeavouring to increase their international<br />
presence through attending <strong>Trenchless</strong><br />
conferences such as the Moscow No-Dig<br />
Conference 2008 and the <strong>Trenchless</strong><br />
Australasia Conference September 2009.<br />
<strong>International</strong> perspectives and relationships<br />
We asked Mr Martin how he thinks people<br />
perceive the quality of Chinese rigs,<br />
“Not surprisingly, there are two qualities<br />
that seem to pervade the perception of<br />
Chinese equipment, those being ‘cheap’<br />
and ‘low quality’.<br />
“Interestingly, from my own research and<br />
experience with newer Chinese manufactured<br />
rigs, I would only partially agree with<br />
those statements,” he said.<br />
Mr Martin concurred with Mr Liang’s<br />
opinion on the technological advancements<br />
Chinese rig manufacturers have achieved.<br />
“The more successful Chinese companies<br />
have made great advances in quality<br />
control, going so far as to source the major<br />
components for the HDD drills from <strong>North</strong><br />
America.” Mr Martin listed motors, hydraulic<br />
components, pups and gearboxes as<br />
the parts most likely to be sourced from<br />
outside of China.<br />
“The resulting machines are more<br />
expensive than their purebred Chinese<br />
counterparts; however they offer much of<br />
the reliability of <strong>North</strong> <strong>American</strong> machines<br />
while still being significantly cheaper.”<br />
Mr Martin concluded from his research<br />
that these Chinese rigs are, on average,<br />
50 per cent less expensive than<br />
a US-manufactured drill with comparable<br />
pullback capacity. Mr Martin did acknowledge<br />
though, that Chinese drills will be<br />
slower and offer fewer options than the<br />
major manufacturers.<br />
The Chinese machines are still in a<br />
process of building a solid reputation.<br />
Some Chinese companies, recognising the<br />
advantages of expertise and longevity,<br />
have sought to forge partnerships with<br />
established international companies.<br />
<strong>American</strong> companies are taking<br />
advantage of the increasing technical<br />
capability and lower manufacturing costs<br />
of the Chinese HDD manufacturers.<br />
In May 2008, Charles Machine Works<br />
(CMW), manufacturer of underground construction<br />
equipment Ditch Witch, signed<br />
a joint venture agreement with Tu Xing<br />
Sun No-Dig Tech of Beijing, China. CMW<br />
said that Tu Xing Sun is considered to be<br />
a leader in the manufacture and distribution<br />
of HDD systems in China. CMW CEO<br />
Tiffany Sewell-Howard said “This venture<br />
allows us to strengthen our position in<br />
China and other emerging markets.”<br />
The Shanghai Gudeng Construction<br />
Machinery manufacturing company, specialising<br />
in HDD, exports to Russia, Ukraine,<br />
Pakistan, India, Malaysia and Singapore.<br />
Their HDD technology recently received<br />
first place in the construction machinery<br />
branch of the China Quality Association’s<br />
awards. In order to expand the business,<br />
the company is establishing a joint venture<br />
in Malaysia to be called Jiangsu Gudeng<br />
Construction Machinery Assembly Group.<br />
The factory will have a production capacity<br />
of 300 HDD machines and 100 static pulling<br />
machines per annum.<br />
Developing the industry<br />
The development of the industry is also<br />
being assisted by the development of professional<br />
organisations. The China Hong<br />
Kong Society for <strong>Trenchless</strong> Technology<br />
or CHKSTT was established in 1999 and is<br />
one of the societies affiliated with the ISTT.<br />
Other societies in the Greater China region<br />
include those in Shanghai (SSTT), Beijing<br />
(BJSTT), Guangdong (GDSTT), and Taipei<br />
(CTSTT).<br />
Chinese HDD companies are beginning<br />
to produce reliable, cost effective machinery<br />
for both the domestic and international<br />
markets. Companies such as Hanlyma are<br />
focusing on after sales customer service<br />
and forging mutually beneficial international<br />
partnerships.<br />
The export of Chinese manufactured<br />
HDD rigs is set to continue as companies<br />
build their brands through improved quality<br />
for the less complex and less expensive<br />
machines.<br />
SPECIAL FEATURE<br />
April 2009 - <strong>Trenchless</strong> <strong>International</strong><br />
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