Interview with Zhang Xiaoyi, General Manager of Kunming Machine Tool

In China's machine tool industry, Kunming Machine Tool has a special status. In 1958, the company successfully developed China's first precision single-column coordinate boring machine, which is the origin of China's precision machine tools. In 1993, the company was listed in Shanghai and Hong Kong and is still the only company in the industry with an A+H status. After entering the new century, Kunming Machine Tool underwent two equity changes. The current largest shareholder is the aircraft carrier of the industry, Shenji Group.

Reporter: As we all know, Kunming Machine Tool is one of the “18 Arhats” in the machine tool industry. In the past, the 18 Arhats each had specializations. However, under the new market environment, key enterprises have extended the industrial chain one after another. It has become a trend to infiltrate each other in the product field. Kunming Machine Tool Preparation How to deal with this change?

Zhang Xiaoyi: Not long ago, the old minister, He Guangyuan, also accused me of the fact that the roots and the base of the Kunji could not be lost. I understand that what the old minister said is the root and the essence of our corporate culture: creation first, quality first, and soul.

How many republics we created in the past did not say the first thing. What we need to do now is to combine enterprise innovation with market demand. Indeed, the current China machine tool industry not only homogenizes products, but also has a homogenization trend. After the traditional layout was broken, some companies were eager to enter unfamiliar industries under market orientation. I think the sustainability of the company is doubtful.

Kunji will still focus on the manufacturing of boring mills during the 12th Five-Year Plan period. Through market analysis, we believe that the future market demand for boring and milling will still support the development of the company. High-precision machining centers, five-axis boring and milling machines, and large-scale floor boring machines are highly imported every year. Although the number is small, the amount is very high. We can't meet domestic demand. We feel embarrassed and we also see market opportunities. Kunji does not consider entering more fields, but must keep its roots.

Of course, specific to the product strategy, Kunji will be adjusted in due course. Now Kunji's product strategy is: large-scale, precision, compound, complete sets.

In the past, it was thought that large or thick, this view is now out of date, the traditional advantage of Kunji is precision manufacturing, and we will bring this good tradition to the field of heavy and heavy machine tools.

In previous years, there was another keyword in our product strategy: CNC. Last year, the company's product numerical control rate has reached more than 80%, so we adjusted the strategy in due course.

Compounding is a development direction in the future, and a single process now needs to integrate as much as possible, such as turning and milling.

In addition, the maturity of customers is now higher than in the past. Even if we buy equipment ourselves, we hope to become a line and a complete set, and finally form a complete solution.

Sany Heavy Industry has recently purchased equipment from Kunji. This puts forward higher requirements on the overall quality of the product. It turns out to be a requirement of the product and now focuses more on service. Because machine tools are not consumables, timely service is very important. Even imported products cannot guarantee no problems. Then, it is particularly important to have a breakdown and how to respond quickly and effectively to the needs of the customer after-sales service.

Reporter: You mentioned that Kunming's machine tool products are developing toward large and heavy industries. Now the industry is not only a traditional dominant company in the large heavy-duty products, private enterprises are also very enthusiastic. Has Kunming Machine Tool considered the risk of excess capacity?

Zhang Xiaoyi: Now in the industry, everyone is carrying out the transformation of big and heavy projects. You are big, I am bigger than you. In the long run, there will certainly be a surplus.

However, there are still three reasons for this. There are three reasons.

First, China's industrialization is undergoing a transition from a light industry to a heavy industry. It has only just begun. At least in the next three to five years, there will be support for market demand.

Second, world economic integration. The trend of shifting industrial economy to Asia is very obvious. Machine tool manufacturing is a labor and technology-intensive industry. The labor costs in Europe and the United States have constrained its industrial development. For example, our major shareholder, Shens Holding Group, has labor costs. More than 40%. The cost of labor in China cannot be so low over the long term, but it still has a competitive advantage overall. In this way, in addition to satisfying domestic demand, equipment exported to foreign countries will also increase. Although there is still a gap with the top multinational companies, Chinese machine tools have made great progress in the past five years. At least people know that Chinese machine tools can be used.

Third, everyone is doing, but there are still a few who can really do it. The manufacture of large and heavy products is thresholded and requires certain knowledge. Based on this, I believe that a new round of shuffling is inevitable. On the surface, Kunji has only recently entered the gantry milling machine. In actual history, the Kunji Machine has accumulated a lot of experience on the gantry. The original vertical coordinate boring machine was the gantry structure, and the Kunji Machine in the mid-1990s was co-produced with Germany. Gantry milling. The conclusion of our investigation is that the market for gantry milling should be said to be broader than the market. Therefore, Kunji is ready to develop gantry milling into a new economic growth point in a few years.

Reporter: The product category is increasing, and the product specifications are improving. Is the current hardware and software of Kunming Machine Tool enough to support it?

Zhang Xiaoyi: In the next step, Kunming Machine Tool will prepare for large-scale technological transformation, build a reloading base and a Shanghai R&D center. The construction of a reloading base serves three purposes. First, the high standards, strict requirements to undertake major national projects, and the second is the production of gantry milling. The other is the development of functional components. The development of the host can not be separated from the functional components, but in recent years, the functional components can not keep up with the development of the host. Kunming expands its functional components, first to meet its own needs, and second to meet external needs. Among them, the precision rotary table is the traditional advantage product of Kunji. There are more than 30 kinds of existing specifications, and it will be developed as a product series after integration. This is also a growth point in the future.

Frankly speaking, we have also been forced to develop functional components. Buy Italian products, delivery time is very long, the price is very expensive. In terms of detection components, some high-precision grating scales required by precision machine tools are not sold to China by multinational corporations. Kunji had a very good grating manufacturing base and came to a halt. Technology needs inheritance, otherwise I'm sorry seniors.

At the same time, Kunming Machine Tool Co., Ltd. is preparing to set up a technical center Shanghai Technical Branch Center. The establishment of this center will speed up the pace of Kunming machine tool technology development and internationalization process, and use regional advantages to strengthen the exchanges with domestic and foreign industries to increase the absorption of advanced technologies and talents.

For more details, I cannot provide it because we have to comply with the information disclosure system of listed companies.

Reporter: In the past, Kunming Machine Tool adhered to the “precision manufacturing” route and gained good profits. Is it now proposed to expand the scale of production and whether it will deviate from the original track?

Zhang Xiaoyi: We must dialectically look at the scale and benefits.

In the face of big storms, the exquisite little board is not as safe as the 10,000-ton wheel. If light is beneficial, there is no scale, and it cannot be long-term. Nowadays, the trend of the entire industry is to allocate resources to large enterprises. If the scale is too small, the ability to withstand market risks is weak. This one.

Second, some products have economies of scale and do not reach the ideal scale. The marginal benefits cannot be fully reflected. The original Kun Machine had gone on the route of multi-species, small-batch or even single-piece production and needed to be corrected.

Third, companies are too small to be marginalized in industries and customers. In the two shareholders' changes of Kunji, they all proposed to reproduce the brilliant pearls of Kunji and comprehensively analyze the market space and its own basis. The scale expansion should be the proper meaning of the title.

Reporter: What did the two equity changes bring to Kunming Machine Tool?

Zhang Xiaoyi: In December 2000, Xi'an Jiaotong University Industry (Group) Co., Ltd. became the largest shareholder of Kunming Machine Tool, and the company was subsequently renamed as Jiaojia Kunji Technology Co., Ltd. This strategic reorganization has fundamentally changed the situation of Kunming Machine Tool's ownership in the ownership structure of the Kunming Machine Tool Company and its monopoly. It has laid a solid foundation for Kunming Machinery to standardize and improve the corporate governance structure and establish a modern enterprise system, especially to solve the problem. The question of whether the person in charge of the company is "being an official" or "doing a business".

Although the huge impact of ideas caused a lot of shock at the time, it seems that Kunji has benefited greatly. This strategic reorganization is a landmark turning point for Kunji. From this point onwards, Kunji has undergone profound changes, realized the transition to modern enterprises, established a standard corporate governance structure, and gradually moved toward the fast track of healthy development. .

In December 2006, Shenyang Machine Tool (Group) Co., Ltd. replaced Jiaoda Industrial Group as the company's largest shareholder. In June 2007, the company name was changed to "Shenji Group Kunming Machine Tool Co., Ltd.". Learning from the advanced experience of Shenji Group as a leading enterprise in China's machinery industry, transforming production methods and research and development methods, and achieving economies of scale and focusing on development have become one of the company's central tasks at this stage.

Major shareholders in the same industry are very helpful to Kunji. Shen Machine has provided many support for the Kunji machine in terms of production, which has broken through the bottleneck of the original production capacity and contributed to the improvement of the performance of the Kunming Machine in recent years. Shen Ji's corporate purpose is to reward shareholders, benefit employees and contribute to society. This purpose is very practical for the Kunji.

Frankly speaking, Shen Ji and Kunji have a competitive relationship on some products. This is historically created and it is unrealistic to attempt to solve them in the short term. In fact, the multi-brand strategy under the Group's vision is also beneficial, as the auto giant's public masses do not have many brands in parallel. Personally believe that moderate competition will help ensure the healthy development of the company.