China's equipment manufacturing industry must "turn a big bend"

As the first to bear the brunt of every crisis, the equipment manufacturing industry once again ushered in a tense moment. In the face of a potentially worse external environment, as well as industrial characteristics such as high investment, high manpower, and long development time, China's equipment manufacturing industry inevitably entered the "transition era."

Li Yining, a well-known economist and professor at Peking University, said that in the globalized market environment, the pattern of China's manufacturing industry that has been stagnant for a long time and products have remained unchanged for many years has come to an end.

In 2010, China's manufacturing output reached 1.955 trillion US dollars, accounting for 19.8% of the global manufacturing industry, becoming the world's largest manufacturing country. However, the reality is that China has not yet entered the ranks of the world's manufacturing powerhouses. The problems of low labor productivity, low added value of products, and insufficient capacity for independent innovation are still widespread.

Abundant labor resources and low cost have always been considered as one of the important factors driving the rapid development of China's manufacturing industry. Nowadays, with the international economic downturn and serious domestic environmental inflation, the advantages of China's manufacturing industry are gradually receding, and the weakness of independent innovation and lack of core competitiveness is even more prominent. It is reported that among the 500 most valuable brands in the world in 2010, there are only 17 Chinese manufacturing brands, and the top 100 are unnamed.

It is a consensus that the manufacturing industry will face a “painful period” of transformation. In the interview of the Chief Financial Officer magazine in this issue, the interviewed companies all proposed the transformation plan. In their view, there is an opportunity in the crisis. It is now the best from “Made in China” to “Created in China”. opportunity. This article interviewed the domestic textile machinery leading enterprises - China Hengtian CFO Yan Yuquan, the leading enterprise in the equipment manufacturing industry - Fuma Machinery CFO Xue Gui and US Regal Electric (Suzhou) Finance Director Liu Xuefeng, sharing them in a comprehensive In response to the crisis, how to accelerate the transformation, "open the clouds and see the sunny days."

Hengtian's addition and subtraction

As a leading enterprise in textile machinery, China Hengtian Group Co., Ltd. (hereinafter referred to as “Hengtian”) is the only central enterprise in China with textile equipment manufacturing as its core business. China Hengtian has 20 directly affiliated subsidiaries, 98 wholly-owned and holding companies with tertiary and tertiary levels, and is distributed in more than 20 provinces and cities in China and nearly 20 countries and regions. In its vision map, it is clearly stated that “re-creating a constant sky” at the end of the “Twelfth Five-Year Plan” will increase the total operating income to RMB 70 billion on the basis of RMB 33 billion in 2011.

At a time when the current macro environment is getting darker, the goal of China Hengtian seems to be a little far away. For a long time, China's textile industry has faced the integration of overcapacity. More than 99% of textile enterprises have been privatized, and the competition is fierce. After 2008, the textile industry's export road is seriously blocked. However, China Hengtian CFO Yan Weiquan is full of confidence in the realization of this vision. "We are more willing to regard the current crisis as an opportunity for transformation, do a good job of addition and subtraction, and lay the foundation for future sprints."

Yan Yiquan believes that in the current financial crisis and the European debt crisis plagued the world, as the CFO is duty-bound, the first to be effective in fulfilling and cooperating with the company's strategic vision. "At present, Hengtian has a financial team of more than 1,500 people, which plays an important role in raising funds, improving the quality of accounting information, and controlling financial risks. It is also one of the backbones of today's response to the crisis."

M&A layout

Germany's "Focus" magazine once pointed out that China's machinery manufacturing sales ranked first in the world, does not indicate the status of China's machinery exports. German machinery exports will remain the world's number one. In the 31 sectors of the machinery manufacturing industry, 17 of Germany, including mechanical handling, power transmission equipment and printing technology, are leading the world.

After joining the WTO, China's textile machinery industry has developed rapidly. In the process of exchanges and cooperation with foreign textile machinery enterprises for many years, the degree of internationalization has greatly increased, and the market share of developing countries in Asia and Africa has expanded rapidly. Some members of ASEAN countries such as India, Pakistan, Bangladesh and Sri Lanka, and Vietnam have come from China. Imported textile machinery has increased significantly.

Disproportionate to the textile and garment exporting countries, although China's production of cotton spinning and polyester polyester textile machinery has advantages, some single machines even reach the world's advanced level, but the overall status of domestic textile machinery is not optimistic. The high-end equipment of domestic textile machinery still relies on imports, and the problem of product assimilation is serious. Most Chinese textile machinery can only be applied to medium and low-end and small garment processing factories, especially looms, finishing machines and knitting equipment. weak. Consistent with the overall situation, although Hengtian's textile machinery manufacturing ranks first in China's precision equipment manufacturing, some products in the fields of cotton spinning machinery and chemical fiber machinery have reached the international leading level, but in textile precision equipment, Post-dyeing and finishing In terms of equipment, Hengtian's development is still relatively backward.

Yan Weiquan shared such a set of data: In the more than 30 years since the reform and opening up, textile machinery products imported from overseas have reached more than 40 billion US dollars. Nearly 200,000 kinds of shuttleless looms are imported, and the domestic market share of domestic textile machinery is around 60%. "From the big textile machinery country to the textile machinery powerhouse, China's textile machinery industry is bound to shift from the past quantitative industry to improve product quality and technology content, from extensive to intensive." Yan Yiquan said that Hengtian has fully realized the technology. Short-board is the key to restricting the quality of products, so it is necessary to seize opportunities and implement transformation in the crisis.

How to complete this transition, mergers and acquisitions is one of the roads. In the summer of 2011, China Hengtian successfully acquired Hong Kong Lixin Industrial Co., Ltd. (hereinafter referred to as “Lixin”). The cooperation between China Hengtian and Lixin was the first victory of China Hengtian Overseas M&A, which will change the overall resources of the Group. The synergy between the market and technology, the printing and dyeing equipment of Lixin Group has made up for the short-term of China Hengtian products. The acquisition of Lixin is that the “Lixin model” will guide the enterprises of Hengtian Group to effectively improve the operation level and accelerate the internationalization process. An effective way.

Founded in 1963 by Fang Shoulin, Hong Kong Lixin is a leading manufacturer of dyeing and finishing equipment. It was listed on the Hong Kong Stock Exchange in 1990 and became the first Hong Kong-listed company in the dyeing and finishing industry. It is also the world's largest manufacturer of dyeing and finishing equipment. Can provide customers with one-stop service, pre-treatment, dyeing and finishing processes can meet customer requirements, and have greater influence in the international market. Due to the impact of the global financial crisis in the second half of 2008 and the cyclical downturn in the textile industry, the global textile machinery industry valuations are at historically low levels. Lixin’s share price has also plummeted. At this time, Fang Shoulin, who has entered the age of ancient times, hopes to find a company that is willing to be a textile machine to continue the cause of the Fang family. The textile machine is the core business of China Hengtian. After several years of negotiations, on June 15, 2011, China Hengtian completed a comprehensive acquisition of Hong Kong Lixin Industry, and Hong Kong Lixin Industry was officially included in China Hengtian.

“China Hengtian Strategic Mergers and Acquisitions Lixin Industry, after several years of planning and preparation work, is the result of careful selection under the strategic background of the three major sectors of China Textile Machinery Group: cotton spinning, chemical fiber, printing and dyeing. Through the merger and acquisition of Lixin Industry, it has made up for it. The short board of China Textile Machinery Group's printing and dyeing board has improved China Hengtian's overall asset quality, competitive advantage and profitability. It has taken the first place in the domestic textile industry to achieve the first comprehensive strength, quality and scale in the world. Big step.” Zhang Jie, chairman of China Hengtian, said with gratitude.

At the same time, Hengtian's strategic vision has also extended to foreign countries, locking in Europe. On August 8, 2011, the pre-delivery ceremony of China Hengtian's acquisition of the non-wovens business of Swiss Oerlikon Co., Ltd. (hereinafter referred to as “Oerlikon”) was successfully completed. The main products involved in the project acquisition include automatic control system and staple fiber packing machine. Patented non-woven staple fiber combing into a net. In order to complete the acquisition, Zhengzhou Hengtian Nonwoven Engineering Technology Co., Ltd., a subsidiary of China Hengtian, established Hengtian Textile Holdings Co., Ltd. in Austria to acquire the assets, liabilities, contracts and equity in Austria owned by Oerlikon in Germany. project. After the acquisition, China Hengtian will continue to increase investment in European production bases, and the non-woven mechanical carding business will continue to serve the traditional market of high-tech products. Zhang Jie believes that all the participants will benefit greatly from the synergy between the acquisition of the carding business and the existing non-woven mechanical units. The acquisition is consistent with China Hengtian’s strategic business objectives, which is China Hengtian. The important layout of the globalization strategy in Europe.

For China Hengtian's M&A layout, Yan said: "China Hengtian is targeting companies with leading world patent technology. Oerlikon has the world's best non-woven manufacturing technology. Due to the impact of the European debt crisis, Oerlikon has no The textile business is in a quagmire of losses, and the funds are in a hurry. We have acquired the Oerlikon project, which was sold at a high price three years ago, with only 2 million euros. In the future, China Hengtian will make full use of European technology, brand and Chinese market. Cost advantage, rapid expansion of product market share. Through product integration, China Hengtian complete non-woven equipment product chain will be formed to enhance product competitiveness and corporate profitability."

Of course, the risks behind mergers and acquisitions cannot be ignored. Regarding the overseas mergers and acquisitions of sudden changes, Yan Yiquan reminded that “overseas mergers and acquisitions must consider the local culture, law, politics, current situation and their own overseas integration, and give full play to the role of Chinese foreign agencies and strengthen communication. Overseas The most difficult job in mergers and acquisitions is the integration after mergers and acquisitions. In particular, we must pay attention to the connection with domestic industries and the control of risks after mergers and acquisitions, especially the lack of proficiency in overseas management talents."

Full budget gate

In recent years, due to the surge in labor costs, the appreciation of the renminbi and the international financial crisis, the gross profit margin of the textile industry is now less than 10%. Since 2011, the surge in cotton price roller coaster has caused the textile industry chain to be generally affected. The production, sales and efficiency growth of the textile industry have all dropped month by month. In the face of multiple attacks, the Chinese textile industry no longer has the advantage of low cost and large export.

Transformation has thus become an inevitable trend. According to Hengtian's plan, it will take seven to ten years to develop China Hengtian into a modern and first-class industrial group with international competitiveness, and become the most influential supply in the field of textile equipment, textile trade and new fiber materials. One of the business, among the important manufacturers of trucks. For the future development of Hengtian, Zhang Jie has a clear understanding and planning. He believes that capital operation and technological innovation are the two "wheels" for enterprise growth. The rapid growth of enterprises requires two "wheels" to turn together.

Good corporate governance is the most critical factor to ensure the company's development. In order to effectively cooperate with the Group's development strategy and control the diversified transformation risks of Hengtian, Hengtian selected the comprehensive budget.

“Modern business management should not only focus on daily business activities, but also on investment and capital operation activities; not only must consider the supply of funds, control of costs, but also consider market demand, production capacity, output, materials, labor and power. Coordination and configuration. The comprehensive budget has the characteristics of full staff, full amount, and full course. All staff are intended to mobilize the vitality of all employees, decompose budget targets at different levels, establish cost and benefit awareness for all employees, and work with each unit. The planning and company resources are clearly matched and prioritized to achieve effective allocation and utilization of resources. The budget planning process and budget indicator data directly reflect the efficiency of resources used by the group, subsidiaries and departments and the demand for various resources. It is the starting point for scheduling and allocating enterprise resources. Through the balance and execution of comprehensive budgeting, enterprises can make the best use of limited resources to avoid waste of resources and inefficient use.” Yan Yiquan's design thinking on comprehensive budget After a clear pulse, we began to open tenders and do the whole for the group's informationization. Ready.

In the selection of group information application projects, Hengtian finally chose Inspur ERP. “We value the maturity of products, product leadership and integration of large projects and implementation of service capabilities. Inspur is very important in the field of group management. Mature, there are many successful cases." For the comprehensive budget system, Yan Yiquan put forward the idea of ​​“establishing a pyramid-shaped budget management structure and a fan-shaped system for group, business, and enterprise multi-angle hierarchical management”. Hengtian will work with Inspur. Through the analysis of the needs of various business segments and the management requirements of the Group Headquarters, in September 2009, a strategically oriented comprehensive budget system linking development strategies and business objectives was established, and a total budget for the manufacturing industry was designed. 173, the trade industry budget table a total of 106, the real estate industry budget table a total of 116, the investment industry budget table a total of 107 budget reporting system.

Yan Weiquan has a high evaluation of the comprehensive budget. “At present, it is possible to expose possible problems in advance. Follow the budget plan to follow the implementation of budget control management, focusing on the two themes of fund management and cost management, strictly implementing budget policies, and timely reflecting and supervising. The implementation of the budget, timely implementation of the necessary constraints, the integration of the corporate management method strategy into the implementation of the budget process, and ultimately form a full staff and all-round budget management situation. With reference to the budget results, the company's senior management can find potential The risks are pre-emptive measures to resolve risks. Once the budget is determined, it has 'legal effect' within the company, and each department must strictly implement it in production marketing and related activities."

Through the launch of the Group's comprehensive budget financial informationization, Hengtian realized real-time dynamic query and analysis in different places, and achieved automatic warning prompts, effectively strengthening the financial supervision function. More importantly, it helps management to jump out of the details of the data, achieve remote pre-forecasting, and in-process monitoring functions, reducing uncertainty and risk in decision-making, and improving the efficiency of decision-making quality. "In the face of the ever-changing risks, in order to make the wheels of capital operation and technological innovation run freely, there are still many aspects to improve the overall budget, and we need to work together." Yan Yiquan finally stressed that as a CFO, it can not be relaxed, but often Strengthen professional judgment, "Financial risk management and control should abide by the rules of the business.

Crack the crisis and control the financial road

In mid-December 2011, an "Emergency Notice" from the State-owned Assets Supervision and Administration Commission of the State Council was issued to various central enterprises. The central enterprises are required to "closely track changes in the domestic and international situation, fully estimate the severity and intensity of market competition, strengthen cost management and fund management; strictly control the scale of lending and asset-liability ratio, ensure stable and rapid growth of production and operation, and prevent major ups and downs" .

Since 2011, the soaring cost has caused the profits of central enterprises to plummet since the third quarter. According to the data, from January to November 2011, the central enterprises realized operating income of 18.4 trillion yuan, a year-on-year increase of 22.6%; the accumulated net profit was 831.79 billion yuan. It increased by 3.6% year-on-year. In 2010, the year-on-year growth rate was 34.7% and 50.1% respectively.

“Responding to risks, finance is everywhere, everywhere.” China’s Fuma Machinery Group Co., Ltd. (hereinafter referred to as “Fuma Machinery”) CFO Xue Gui, who is in the cost-sensitive equipment manufacturing industry, summed up the response to the financial crisis. Financial road. Fuma Machinery was established in 1979. It was formerly the Forestry Machinery Company of the Forestry Department. It is now one of the core equipment manufacturing enterprises of China World Machinery Industry Group Co., Ltd. Fuma Machinery's engineering machinery products are widely used in the construction of railways, highways, water conservancy, ports, energy, urban and other infrastructure, especially by the Three Gorges Project, the Qinghai-Tibet Railway, the West-East Gas Pipeline, and many other national key projects and key units. Use. At present, its assets are 6.4 billion yuan and it has 30 wholly-owned and holding subsidiaries. Among them, Changlin (6.58, 0.00, 0.00%) Co., Ltd. and Linhai Co., Ltd. (5.40, 0.00, 0.00%) Co., Ltd. are listed companies, domestic products account for about 70% of domestic products, and exports account for about 30%. Products are exported to the United States. More than 130 countries and regions such as Canada, Japan, Germany, and Southeast Asia.

The most important thing - financial risk management

In 2011, the high price of bulk commodities caused the prices of raw and auxiliary materials, coal, electricity and oil transportation to rise, and the operating costs increased, which brought unprecedented challenges to Fuma Machinery. When the national monetary policy is tightened, how to effectively protect the cash needed for the rapid development of the business, capital risk management and control is the top priority of a sound financial strategy, and is a key link to ensure the normal operation of the enterprise.

Fuma Machinery's export contract for wood-based panel machinery and equipment, mainly for customers in Southeast Asia and Africa, with a contract value of tens of millions of yuan. In the case of the continuous appreciation of the renminbi in recent years, the exchange rate has a great impact on export sales revenue and profits. Therefore, the exchange rate risk control of export contracts has become one of the key risk points of fund management. For this reason, under the advocacy of Xue Gui, the export collection and exchange uses the method of long-term foreign exchange settlement and sales to “lock the exchange rate” and increase the scale of import business and increase Import and export of mechanical and electrical products, using foreign exchange to pay for imported goods, to avoid exchange rate risks to the maximum extent.

Balancing the relationship between the return on capital investment and risk is a difficult choice. Controlling cash flow is a profound art of balanced management. Accelerate the return of funds, Fuma Machinery launched a special clean-up of the accounts receivables of the group, and adopted the “no reason to clear the debts” method for clearing the debts, requiring that “the pens and pens be implemented and the pieces have results”.

Since becoming CFO in 2006, how to balance the relationship between high-growth business strategy and sound financial strategy has become a question for Xue Gui. “The most important point in this is that the funds can never go wrong. The company needs to comprehensively consider various factors to do a good job in fund management.” Under the leadership of Xue Gui, the Fuma Machinery Finance Department has a multi-pronged approach: strict cash Management of the preparation, summary and approval of the flow budget; accelerate capital turnover, accelerate the cash payment and cash recovery of the enterprise; seek to recover cash more quickly during the cash transfer process, and arrange the time of cash payment more accurately. The bank settlement method enables enterprises to return customers' cash more quickly; provide more accurate fund forecasting ability, scientifically predict future capital income and expenditure through the financial system, arrange cash payment reasonably, and strive to make the cash expenditure curve parallel with the cash inflow curve . Effectively reduce the safe payment quota of enterprise cash, not only can guarantee cash payment, improve the use efficiency of cash and control ability of fund payment, and provide scientific basis for analysis and assessment of enterprises.

In July 2011, Fuma Machinery formulated the Interim Measures for the Management of Internal Funds Transfers of Group Companies, which was used to guide the funds between subsidiaries to be used for compensation, so as to achieve a win-win situation for both borrowers and borrowers and reduce financial expenses. In order to encourage internal adjustment of funds between enterprises, the Group will use internal fund transfer as a bonus point for the 2012 business assessment. Xue Gui said that for many years, Fuma Machinery has emphasized the strengthening of the management of operating assets, especially the management of receivables and inventory, reducing capital occupation, improving asset quality and preventing operational risks.

However, the continuous expansion of the size of accounts receivable has increased the operational risks of the group companies. In the second half of 2011, Fuma Machinery required all enterprises to strengthen the management of receivables, implement the collection responsibility, accelerate the return of sales funds, and avoid bad debt losses. In order to avoid the risk of loss of inventory, reasonable control of production scale, control of the occupation of production funds, promotion through various means such as price reduction and rebate, increase product sales, promote product sales, and accelerate inventory turnover. At the same time, the quality assurance of the contract will be strengthened, the quality problems and after-sales service issues will be dealt with in a timely manner, and on the basis of improving the service level, we will strive to recover most of the quality guarantee and reduce the risk of capital withdrawal, thus improving the asset quality of the group company. Good protection against business risks.

In the face of the country's continuous adjustment of the deposit reserve ratio and the interest rate hike and contraction of monetary policy, Fuma Machinery's several key development strategy projects will be launched in 2012, while consolidating traditional financing channels, and opening up new financing methods to ensure Funding needs for business operations and development. Enterprises can explore new sales models based on the different characteristics of products, such as trade financing, financial leasing sales, etc., to broaden business channels.

Steady finance is a must-have for CFOs to control risks. Xue Gui suggested that first, strengthen debt risk management and control, curb the blind expansion momentum, and strive to maintain a stable capital structure while developing rapidly; second, strengthen the management of major financial issues. Including strengthening large-scale fund management, establishing a fund payment system; doing a good job in financial management of major investments; strengthening centralized management of funds; strictly implementing various rules and regulations of the Group on centralized fund settlement, bank account management, and controlling investment in financial derivatives and securities; Any enterprise may not engage in high-risk investment business such as stocks, bonds, funds, financial derivatives without the approval of the group. “In the current tightening of credit and the difficulty of loans, enterprises should fully utilize and utilize the financial platform of the group finance company.”

“Controlling risks is a vital protection forest for enterprises, and it is also the most effective assessment standard for CFO's ability level.” Xue Gui thinks so.

Killer 锏 - R & D and cost reduction linkage

In the past 10 years, the self-sufficiency rate of machinery industry equipment has increased from 70% in the early period of the 10th Five-Year Plan to 85% in the present, and the contribution rate to the total industrial output value of the country has reached 22.29%. Although the localization rate is as high as 85%, the remaining 15% of key basic components such as hydraulic components and systems, high-grade bearings, power electronics and inverter equipment, high-end valves, CNC systems and functional components are imported, and these 15 % of non-domesticized equipment has taken 70% of its profits.

"This has become an important problem that restricts the sustainable development of China's equipment industry. To build an industrial power, we must develop high-end equipment manufacturing." Wang Ruixiang, president of the China Machinery Industry Federation, believes that the development of modern manufacturing industry lags behind, and the proportion of traditional processing industries is too large. Has not yet formed a strong core competitiveness.

Under the circumstance of increasingly tight resources and environmental protection, countries are striving to optimize the industrial structure. The equipment manufacturing industry is a technology-intensive machinery industry, and consumes the lowest energy and resources in heavy industry, representing the frontier level of manufacturing in various countries. According to media reports, as an important part of the strategic emerging industry, China's high-end equipment manufacturing industry's "Twelfth Five-Year Plan" is about to be introduced, the proposed goal is that by 2015, the sales value of high-end equipment will account for more than 20% of the equipment manufacturing industry. It is estimated that the annual sales value will reach 6 trillion yuan. The broad prospects of the Chinese market have also attracted multinational companies such as Caterpillar of the United States, Komatsu of Japan, Hyundai of Korea, and Volvo of Germany to enter the high-end machinery market in China, which has made domestic competition more intense.

Xue Gui said that most Chinese companies are in the low-end part of the industrial chain, and their technical and scientific research capabilities are relatively backward. In order to develop high-end equipment, it is necessary to develop core products around the value of customer service. In the case of rising costs, the development of Fuma Machinery is to build an industrial chain with core competitiveness and carry out integrated operation of the group. Change the status quo of the parent company to manage only the development, and develop the products together with the subsidiaries to form a research and development system and a unified international marketing system. According to the development trend of the construction machinery industry, in the case of tight capital in 2008, Fuma Machinery invested 200 million yuan in research and development expenses for the development of relatively high-end excavators, with product specifications ranging from 22 tons to 36 tons; in the field of wood-based panel machining The continuous press production line was developed, which changed the equipment of the previous multi-lamination machine.

Xue Gui, who has been in the field of equipment manufacturing for many years, believes that the fundamental way out of the traditional manufacturing industry is to transform and upgrade, that is, to transform from the traditional manufacturing industry to the modern manufacturing service industry and to build the core competitiveness of the enterprise. However, due to the huge investment brought by R&D, the CFO’s control has been seriously tested. Xue Gui expressed his approval. “For the manufacturing enterprise group, R&D capability and cost control ability are the benefits of CFO’s control over corporate finance. sword."

Xue Gui believes that in the face of ever-changing and severe situations, it is necessary to jump out of the inherent mode of thinking, and change thinking can more effectively manage costs. In order to increase the cost reduction of design and process, Fuma Machinery introduced the performance evaluation criteria for cost control in the design stage. This means combining the cost control system from the R&D system from the source. According to Xue Gui, the cost of many products has been determined as early as the design stage. Under the premise of considering quality problems and function settings, product designers can appropriately introduce the concept of cost management system, which will be a technology drop for Fuma Machinery. This and the process of reducing the cost of the work has gained valuable experience. “We must continuously strengthen process consumption management, strictly control various consumption indicators, and improve the efficiency of process reduction. All these breakthroughs cannot be at the expense of quality. Quality departments, finance departments, R&D departments, and production departments participate in design and process decline. This, deep digging down the space, this is a powerful killer to deal with risks. Promote design and process cost reduction, improve the efficiency of capital use, comprehensively enhance the competitive advantage of product cost, will resolve the financial risk of product sales from the source."

In addition, to build the core competitiveness of Fuma Machinery products, we must also reduce costs in the supply chain. “To make products and services competitive, the right to speak to suppliers needs to be strengthened. For strategic supplier partnerships, price is an important reference, but not the only determinant.”

In order to maintain the long-term competitive advantage of the entire supply chain, Fuma Machinery has strengthened the management of the supply chain, fully implemented open bidding procurement, price comparison procurement, and established the supplier's AB corner system. In the first ten days of November 2011, China Fuma held a public bidding and price procurement efficiency monitoring work meeting, requiring all enterprises to fully reduce costs, realize the institutionalization, standardization and normalization of open tendering and price comparison procurement, and purchase through centralized bidding and price comparison. Reduce the cost of raw materials, accessories, and parts. In the supply chain, Foma Machinery has strengthened its strategic cooperation with suppliers. On the one hand, we will give more support to the suppliers of high-quality suppliers and further obtain the preferential price; on the other hand, we will adjust the overall structure of the suppliers, increase the intensity of open bidding and price comparison, and actively introduce new ones. Qualified suppliers optimize the entire supplier team. After three years of implementation, from 2009 to 2011, China Fuma Machinery has saved nearly 160 million yuan in cost through this strategic management cost innovation.

Regal's growth twin engine

Headquartered in Wisconsin, USA, Regal Electric (Group) (hereinafter referred to as "Rayb Group") was founded in 1955. After the 1980s, the Regal Group gradually developed into a multinational company and listed on the NYSE in 2005. . Currently, there are 46 manufacturing bases and 12 technical centers in the United States, Canada, Europe, Brazil, Thailand, and India. In 2010, the sales volume of the Regal Group reached US$2.3 billion. Its products, such as motors, generators and gear drives, are widely used in various fields such as power, metallurgy, environmental protection and water treatment, power generation, industrial refrigeration, and mining. Forbes magazine was selected as one of the top 400 companies in the United States, and Fortune Magazine ranked the top 100 in the United States.

In the face of the global superimposed crisis, the Regal Group has become one of the world's largest motor manufacturers through mergers and acquisitions, as well as the world's leading manufacturer of electrical equipment and mechanical transmission equipment. At present, the Leibo Group is committed to the development from heavy industry to high-tech industry. In addition to the external engine of M&A, the cost of control is also the internal engine of its leap-forward growth.

M&A winner

Successfully completed 32 acquisitions in 25 years, the Regal Group adopts multi-brand, large-scale integrated operation mode, and guarantees the recovery of investment with strict procedures.

“In the process of transforming to multinational corporations, the Regal Group has achieved its goal of global distribution through acquisition expansion and reorganization and joint venture. Through multiple mergers and acquisitions in the United States since 1994 and mergers and acquisitions in China since 2001, The strategic goal of the electric company.” Liu Xuefeng, financial director of Regal Electric (Suzhou) Co., Ltd. said that since 2002, Regal and Shanghai Jinling (4.47, 0.00, 0.00%) established the first joint venture in China and acquired through 10 years. Changzhou CMT, Xinya Electric, Jiaxing Morley, Wuxi Huada and other six or seven mergers and acquisitions, China headquarters was established in 2009. The expansion of the Chinese market has also injected new power into the development of the Regal Group. In 2010, China's 2,400 motor manufacturing enterprises produced a total of 220 million kilowatts of motor, with a total output value of more than 60 billion yuan. According to China's plan, by 2020, the total installed capacity of generators will reach 1 kilowatt per capita, or 1.5 billion kilowatts (the current US is 3 kilowatts). According to the international general estimation method, the ratio of the total installed capacity of the motor to the total capacity of the generator is 2.5:1-4. According to the calculation of 3:1, it is expected that the installed capacity of the motor in China will increase to about 4.5 billion kilowatts in the next 10-15 years. The market space and growth rate of electric motors are very large.

The key to the acquisition of AO Smith's electrical products on August 22, 2011, is to make the Regal Group a global leader in motors.

On December 13, 2010, the Reebok Group announced the seventh acquisition in 2010 to acquire all of the business of Electrical Products Company (hereinafter referred to as "EPC"), a company of AO Smith Corporation. The acquisition is in line with the established goals of the Regal Energy Efficient Technology business, strengthening regional influence and providing a platform for collaboration. EPC, based in Tip Town, Ohio, includes motor manufacturing plants in the United States, Mexico, China and the United Kingdom. The acquired company manufactures and sells a variety of sealed motors, pumps, shunts, power, ventilation and air conditioning engineering and general industrial applications. The transaction amounted to approximately $875 million, and the acquisition is expected to exceed $700 million in sales for the first year after the acquisition. "After eight months of antitrust review by the US Department of Justice, the acquisition of Smith's EPC company, the Regal Group's market share will become the world's first, this unusual acquisition is extremely obvious to both sides."

And for AO. Smith has also benefited from this acquisition. After selling its electrical products related companies and receiving about $730 million in cash including adjustments to operating funds and 2.83 million US Regal shares, AO. Smith's 2011 third-quarter financial statements released data showed that operating profit for the third quarter was $39.9 million, a year-on-year increase of 6% compared to $37.6 million in the third quarter of 2010. AO. Paul W. Jones, CEO and Chairman of Smith, believes that “the sale of an electric company allows us to have sufficient cash and debt repayment ability to invest or repurchase shares of the company. We believe that the Reb Group has a good fit for EPC. company culture."

Henry Knueppel, chairman of the Regal Group, believes that the successful acquisition of this typical acquisition is in line with the value-added standard of the acquisition strategy. EPC brings exciting new technologies, enhances our geographic influence and promotes synergies. In addition, the value-added effect of this transaction will bring a more comprehensive product technology portfolio, which will add value to customers. ”

"The cultural styles of the two companies are completely different. AO. Smith has a history of 140 years, is relatively conservative, pursues profit margins, and risk control pays more attention to the interests of shareholders. After the sale of the motor business, it fully realizes the transformation of water treatment strategy. Bo Group pays more attention to the growth of the company, attaches importance to market share, and pays attention to the company's sales rate. After the acquisition of EPC, the Leibo Group will occupy the segment of the special motor industry in the refrigeration industry. This part of the product has a high rate of return and competitors enter. The threshold is relatively high. The company after the acquisition of the combination has become one of the largest motor companies in the world. The culture wins each other and complements each other's product advantages and enhances the ability to cope with the crisis. It is a win-win situation." Liu Xuefeng said.

Force control cost

The Regal Group's third quarter 2011 earnings per share of 1.33 US dollars, 0.19 US dollars higher than analysts' expectations of 1.14 US dollars; operating income annual growth rate of 24.7%, to 736.9 million US dollars, estimated fourth quarter 2011 earnings per share of 0.67 The dollar is ~0.73 US dollars, the market is expected to be 0.9 US dollars per share. As of now, the motor, machinery and India industries have maintained strong growth, but with the spread of the European debt crisis and the changes in China's macro environment, its business will inevitably be affected.

“55% of Regal's products in China are sold in China, and 45% are exported to North America. Due to the impact of economic globalization, Regal Electric (Suzhou) Co., Ltd. hit a new high in September 2011, October. It quickly fell back." However, Liu Xuefeng said that he had experience in dealing with the US financial crisis in 2008, and now he is calm.

面对销量的下降，雷渤将降低风险的关键锁定在材料采购的联动机制上，对于每份大宗商品的长期采购合同，在期货采购中都严格的执行风险对冲，将高风险尽可能降低到最低点。“作为工厂的财务总监，需紧密围绕集团的战略目标，围绕预算来展开风险对冲，将业务风险、生产经营的风险化解到各个层面，实时监控。”面对因此而产生的大量闲置生产劳动力，刘雪松强调培养一个工人并不容易，因此重点放在控制成本方面。

2011年11月份，分厂的利润率依然保持在较高的水平。“关键时刻，销售、生产、财务等业务部门要做到信息共享，财务需要依靠有价值的数据来管理企业。”

当金融危机等特殊时期来临时，管理者需要重新审视成本管理方式。“从成本管理的角度来讲，管理者更加关注成本所产生的原因，区别出哪些成本是给企业带来增值的，哪些成本对企业来说是不增值的，从而进一步提高成本管理的针对性。传统的成本管理往往以业务量为基础来对生产能力等间接成本进行分配，但这些成本的产生动因却存在着多种差异。在经济形势较好时，企业的利润率较高，管理者往往不关注或者忽略了其中的差别。”

希捷科技有限公司是全球最大的硬盘和读写磁头供应商之一，同时是计算机存储领域解决方案的领头羊，占据了当今信息世界的核心位置。在希捷科技(苏州)有限公司的职业经历，让刘雪峰对成本风险管理有了深入的理解，“现代企业的竞争，最本质的还是成本的竞争，无论企业采用什么类型的战略，从企业内部来说持续的成本降低，仍然是企业获得竞争力提升的重要途径。”刘雪松认为深入研究管理企业成本的方法，是应对复杂多变的外部经济环境必修的功课。

而力控成本，正是推动雷勃集团布局世界的核心动力引擎所在，在中国的战略规划是持续不断地纵向和横向扩充产品范围、并通过并购和深化自身发展来扩大市场占有率。雷勃的下一次发展将继续创新和提供推动世界必需的解决方案。展望未来，这或许是他们别具一格的扩张奥秘。

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