Seeking to transform in a fragmenting global trailers market 在正在碎片化的全球半挂车市场中转变 David Li Sep. 2016 创造新价值 Driving new value Moving the world
Ⅰ. Building up the global operation during the honeymoon of the globalization - CIMC Group - CIMC Vehicles Ⅱ. Reviewing the transition of globalization: the ending of honeymoon Ⅲ. Seeking to transform in a fragmenting global trailer market 中国国际海运集装箱 ( 集团 ) 股份有限公司 CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) LTD. www.cimc.com
A single container plant CIMC Group China International Marine Containers Ltd. was founded in 1980 JV between EAC and China Merchants 3/19
A global manufacturing power CIMC Group 2015 total revenue: RMB 58.7 billion Listed on Shenzhen Stock Exchange (since 1994) and Hong Kong Stock Exchange (since 2012) Employees: 50,000 in China; 7,000 overseas containers RMB 21 billion trailers RMB 13.2 billion processing equipment RMB 9.3 billion offshore engineering RMB 8 billion airport GSE RMB 2.8 billion (source: CIMC Group 2015 annual report)
Global operation: the basic facts CIMC Vehicles 25 plants around the world Employees: 10,000 employees in China, 3,000 overseas 2015 total revenue: US$ 2.13 billion; 2015 net profit: US$ 101 million 2015: Revenue and sales volumes Global revenue China US$ 970 million North America Gross market Europe US$ 736 million US$ 326 million US$ 95 million Global sales volume trailers 100,334 units special-purpose vehicles 13,617 units 5/19
Global operation: major domestic plants CIMC Vehicles SCVC THT QCTC Location: Shenzhen, Guangdong Employees: 1,751 (incl. Xinhui) Location: Yangzhou, Jiangsu Employees: 1,820 Location: Qingdao, Shandong Employees: 320 Huajun Qingdao Reefer Location: Zhumadian, Henan Employees: 1,910 Location: Qingdao, Shandong Employees: 420 (incl. CRTI) 6/19
Global operation: major overseas plants CIMC Vehicles CIMC Vanguard CIMC IE LAG MLI Location: Monon, US Employees: 585 SDC Location: South Gate, US Employees: 96 Location: Bree, Belgium Employees: 470 CIMC Thailand Location: Melbourne, Australia Employees: 70 Location: Belfast, UK Employees: 950 Location: Bangkok, Thailand Employees: 100
Local knowledge CIMC Vanguard CIMC Vehicles SCVC CIMC-IE Europe THT USA Headquarters China UK Thailand Other emerging markets Australia 8/19
Ⅱ. Reviewing the transition of globalization: - China: Transition from high-growth economy to two-speed economy - US: The future of the new trade agreement such as TPP begin to blur - EU: After Brexit, EU market is heading toward regionalization - ROW: Most of the Economy are demanding more contents of local manufacturing 中国国际海运集装箱 ( 集团 ) 股份有限公司 CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) LTD. www.cimc.com
2013--1 2013--3 2013--5 2013--7 2013--9 2013--11 2014--1 2014--3 2014--5 2014--7 2014--9 2014--11 2015--1 2015--3 2015--5 2015--7 2015--9 2015--11 2016--1 2016--3 2016--5 2016--7 Outlook: China Reviewing the transition a) Two-speed economy economic expansion 58 56 54 52 50 PMI: Service industries economic contraction 48 46 44 PMI: Manufacturing industries (source: China National Bureau of Statistics) 10/19
Outlook: China Reviewing the transition b) Two-speed trailers industry Declining Growing 11/19
Transforming: the definitions Seeking to transform The honeymoon of globalization is over. The global trailer market is fragmenting. In order to pursue sustainable growth, we need to build up our ability to localize our operation at all major regional markets. Since 2013, CIMC Vehicles has increased its over-sea revenue from 610 million USD to 1.2 billion USD. The number of over-sea employees has increased from 1,500 to 3,000. We are migrating from a China-oriented operation to a global-oriented operation. We are migrating from traditional manufacturing process to a digitalized manufacturing process. We are migrating from a functional organization to an agile organization. I call such migration, the transforming. 12/19
Transforming: the formula Seeking to transform Product Production Overheads Revenue digital modeling manufacturing execution system global sourcing and synergy play localized operation cross-over design inter-continental manufacturing global collaboration local knowledge Digitalized Manufacturing Process Global Operation 13/19
Transforming: the Capex Seeking to transform Our investments at the global trailer market: 2014: CIMC Silvergreen Location: Günzburg, Germany Employees: 85 Tank trailer plant Location: Jeddah, Saudi Employees: 10 Chassis plant Location: Ho Chi Minh City, Vietnam Employees: 6 2015: Chassis plant Location : Emporia, Virginia Employees: 25 CIMC Vehicles South Africa Pty Location: Johannesburg, South Africa Employees: 180 Curtainsider plant Location: Gdynia, Poland Employees: 16 14/19
Transforming: the Capex Seeking to transform Our investments at the global trailer market: 2016: Vanguard #2 plant Location: Trenton, Georgia Employees: 77 SDC Location: Belfast, UK Employees: 950 Light Tower trailer components plant Location: Dongguan, China Employees: 230 2017: MLI Tank trailer plant Location : Melbourne, Au Employees: 100 Gulf Reefer trailer plant Location: Hidd, Bahrain Employees: 20 Magellan chassis plant Location: Yangzhou, China Employees: 100 15/19
Transforming: the results Seeking to transform Total revenue (US$ billions) Revenue from overseas operations 2013 2.08 0.61 2014 2.26 0.85 2015 2.13 0.98 2016 (projected) 2.30 1.20 Trailers output Other vehicles 2013 69,500 33,400 2014 86,800 28,500 2015 100,300 13,600 2016 (projected) 100,500 10,000 (units) 16/19
Transforming: the experience to share Seeking to transform Walk the walk Transforming is like walking. The result depends on how many steps are walked rather than how big each step is. Deal with the unexpected Transforming is like navigating through unfamiliar waters. To large extend, the Success depends on how well-prepared the crew are for the worst-case scenario. 17/19
Transforming: the experience to share Seeking to transform Shift to agility Transforming requires a profound organizational shift, from a functional or matrix organization to an agile organization. Such shift would entail more cross-over design & inter-continental manufacturing. Such shift would enhance global supply chain and global cash flow management. Such shift would trigger a lot of collaboration with our partners. 18/19
共创新价值 Together, we can.