With the increasingly severe international situation, localized production has become a key plan for high-altitude operation equipment manufacturers. Providing localized services to customers is not a new concept, but this concept is increasingly reflected in the production layout of OEMs. For example, Xingbang Heavy Industries plans to assemble high-altitude work platforms at its production plant in Poland to supply the European market, which is in line with tariffs on Chinese made equipment entering the European Union. However, Xingbang Heavy Industry has been planning to produce products for the European market at its factory in Poland since 2021. Xingbang Heavy Industries, headquartered in Changsha, China, is implementing the strategy of "European manufacturing serving Europe", which means that its Poznan factory will be fully responsible for the assembly of scissor and boom high-altitude work platforms, exclusively for the EU market. Although there were plans to produce products for the European market at the Poznan factory as early as 2021, the announcement of this strategy was made during the dealer open day in July, aimed at reassuring Starbond Heavy Industries' European distributors and customer base that temporary tariffs will not have a long-term impact on their business. The temporary tariffs implemented on July 13th imposed a 56.1% tariff on Xingbang Heavy Industry, and Xingbang is appealing against it. The European Commission will make a final ruling in December this year.
Richard Butler, CEO of Starbond Europe at Starbond Heavy Industries' factory in Poland, said, "Our strategy is very clear; we are here today, we will still be here tomorrow, and we will be here in the future. This cannot be clearer." According to an ongoing investigation by the European Commission, it is required that 60% of the components of each high-altitude work platform must be produced outside of China and have clear traceability. Xingbang's plan is to purchase 75% of the components in the equipment assembled by the Polish factory from countries other than China. At present, the Polish factory produces scissor and boom type aerial work platforms for the North American market until its new factory in Mexico starts production this year. The production situation of the Polish factory covers an area of 19000 square meters, was established in 2021, and currently has 120 employees. Due to the challenge of hiring local skilled workers, over 50% of the factory's production staff come from countries outside of Poland, including China, Ukraine, Southeast Asia, and Colombia. As of now, the factory has received an investment of 10 million euros, and its annual production capacity can reach 5000 scissor type aerial work platforms and 3750 arm type aerial work platforms when operating at full capacity. Xingbang Heavy Industry's strategy is to gradually launch localized European products in Poland and continue investing 60 million euros in supply chains outside of China over the next three years. In addition, a European R&D team will be established in Poznan to be responsible for the development of localized products and the final certification of CE certified equipment. The company has procured components from multiple countries, including drive motors and counterweights from India, batteries from Vietnam, blue frame components and chassis from Poland, Deutz batteries from Germany, tire components from Belgium, and various valves from Italy. The Poznan factory has added Xingbang's 12000 square meter European headquarters in Ridderkerk, Netherlands, as well as its global headquarters in Changsha, China. In addition, the company has eight other offices worldwide with a total of 1500 employees. To further expand its presence in Europe, Starbond will also establish a base in the UK, possibly located in the city of Derby.
Zoomlion also believes that having actual production bases in major markets is the key to success. Ren Huili, General Manager of Zoomlion Intelligent Aerial Work Equipment, said, "If you really want to occupy overseas markets, establishing production facilities is the only way." In the future, Zoomlion Aerial Work Equipment will have three main production bases: a headquarters in Changsha, an existing Mexican factory in the US market, and an yet to be established European factory. We will also establish corresponding supply chains in these regions to meet production needs, "Ren Huili added." What I mean by globalization is not only the production in other countries, but also the globalization of supply chains, logistics, and transportation systems. Globalization and localization will be our overseas strategy. "What if tariffs are imposed on high-altitude work platforms produced in Mexico? Ren Huili said, "We will establish factories in Europe and may also set up production facilities in the United States." Li Ying, General Manager of Liugong High Altitude Operation Equipment, also holds a similar view from an international perspective. The company's internationalization plan is divided into three main target markets: firstly, mature non tax markets such as the UK and Australia; Next are emerging markets such as South America and Southeast Asia; Finally, there are mature markets related to taxation, mainly the European Union and the United States. Li Ying said, "We launched our overseas business in 2023, and one thing we won't do is rely on price competition - it will undermine trust and revenue." The advantage of LiuGong high-altitude operation equipment is that the parent company has a global business network, which allows for easy storage of components, enabling LiuGong International to handle high-altitude operation equipment components. In addition, LiuGong has existing production facilities both domestically and globally, which means it does not need to make large-scale infrastructure investments to enter the market. We have been operating for a long time and have fully owned our fixed assets, so our costs are very low and we can still make a profit even with low sales volume.
Earlier this year, Karel Huyser, General Manager and Vice President of JLG's Europe, Middle East and Africa (EAME) region, stated that JLG's production layout is becoming increasingly localized and targeted, especially in terms of cooperation. Since joining in 2012, JLG has invested in small manufacturing plants in the UK (producing low altitude work equipment) and invested in a factory in Tonneins, France that produces Toucan elevators. These small factories are part of a larger strategic plan to meet the specific needs and requirements of the region. Both locations serve the large market for JLG equipment. Having localized small-scale facilities means we can produce equipment more quickly and respond to constantly changing customer needs.
JLG has further expanded its scale by acquiring Spanish compact equipment manufacturer Ausa through its parent company Oshkosh. Ausa and JLG have jointly joined Oshkosh's high-altitude work equipment department. Mahesh Narang, Executive Vice President of Oshkosh, stated, "By combining our advanced technological capabilities with a strong training, support, and service infrastructure, we will be able to better serve our customers and achieve targeted growth." Since 2010, JLG has collaborated with Hinowa to produce four compact tracked aerial work platforms, which JLG sells under its own brand outside the European Union. This partnership has expanded to more regions, now including six compact tracked aerial work platforms and two electric EC series second-generation arm aerial work platforms - EC450AJ and EC520AJ. The launch of the second generation of EC series products is a great example of how collaboration based on shared values and a shared passion for product design and development can operate successfully.
"Genie is expanding its global influence. Genie hopes that its new manufacturing plant in Monterey, Mexico can alleviate the company's backlog of orders. Earlier this year, Genie President Josh Gross said, "The Monterey factory is gradually increasing production capacity, and more production facilities will be put into use one after another." Currently, Genie's factory in Italy supplies products to Europe and North America, and Gross said that Genie is seeking to increase its production capacity for telescopic forklift trucks. Regarding the Chinese factory, Gross said, "The operation there has always been very successful." He added, "We have been thinking about how to produce the correct models and configurations that are suitable for export or meet domestic demand. Therefore, we are trying to respond flexibly, constantly adjusting and optimizing our production layout. Currently, there is no significant demand surge in any market, and we are increasing the production capacity of all production lines as much as possible.