Agriculture

Big companies go rural for farming equipment

Numerous farmers have abandoned their fields in search of better jobs and opportunities in China's big cities.
Big companies go rural for farming equipment

For much of China’s civilized 5,000-years’ history, rural farm villages had played the most pivotal role in the economy. However, the appeal of rural life had lost its luster as Beijing embarked on a huge urbanization drive.

Numerous farmers had abandoned their fields in search of better jobs and opportunities in China’s big cities. Zoomlion, one of the largest Chinese heavy industrial machinery manufacturers based in Changsha, Hunan province, stood at the forefront of the nationwide urbanization movement.

The company provided heavy-duty equipment to build streets, skyscrapers and much more, which had sustained China’s economic miracle of high annual GDP (Gross Domestic Product) growth rates for the past few decades.

Nevertheless, a pro-market economy has a cyclical nature and China is no exception to that rule. But such conditions are vital to control inflation, supply gluts and irrational investments.

According to Zomlion’s 2015 mid-term financial statement, the company reported 10.6bn RMB in revenues for Jan.-June 2015; a 24.4 percent drop from the same period last year.

But, the Changsha-based machinery manufacturer disclosed a 35 percent jump in sales of its farming equipment with revenues surging to 2bn RMB for the first half of this year.

"We believe the agricultural equipment market will be a major force in driving growth for the company," Zhang Jianjun, a Zoomlion senior executive, told China.org. "This is all part of the company’s long-term strategy of global expansion in countries involved in the Belt & Road initiative."

Zoomlion’s strategy is not just to export its agriculture machinery, but to sell to Chinese farmers as well.
"China’s goal is to produce a large-scale modern agriculture sector, which is efficient," Ma Wenjin, researcher at China Academy of Social Sciences, is quoted as saying.

Zoomlion harbors ambitious goals as the company expects its sales of agriculture machinery to account for 30-40 percent of corporate revenues in the next five years.

Modernizing Chinese farms to meet or exceed Western standards has a long way to go. Many Chinese farmers rely on archaic tools to till small plots of land. To succeed in a new ‘Golden Age, they must utilize the latest agronomy crop methods with access to the most-advanced mechanized farming equipment.

"To ensure effective supply of food," Liu Xian, director of China’s Ministry of Agriculture Mechanization Department, told CMBOL news Website. "There is an increasing reliance on mechanization in the plowing, planting, field management and harvesting stages of production for dependable high yields."

Zoomlion plans to introduce more new agriculture machinery to the global market, but they must test them beforehand."Technological breakthroughs will be the key to the farming equipment market," Zoomlion Chairman and CEO Zhan Chunxin told China.org. "Through innovations and updating of machinery products, strong (farms) will become stronger." 

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