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| The opening ceremony of Amada Innovation Fair 2011 |
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The Japanese metalworking machinery manufacturer Amada has its eyes on the China market. Just last December, it organized for the first time the "Amada Innovation Fair 2011" (AIFC 2011) at Shanghai World Expo Exhibition and Convention Center to show the competence of the company as an integrated manufacturer of metalworking machinery. Toshio Takagi, Senior Managing Director of Amada Co Ltd, tells CMJ more about the company's new strategy in China.
CMJ: We are pleased to be able to attend this event of Amada. Could you give us a brief introduction?
Mr Takagi: Of course. AIFC 2011 is the first large exhibition organized by Amada in China. It has an exhibition area of 10,000sq m on which we display more than 50 machines and solutions of all kinds to our guests. We have invited more than 3,000 users to participate in the event.
The event will last for three days during which we will organize two academic seminars and two technical seminars. The seminars will talk about strategic ideology including the development directions of the processing industry, techniques involved in applying laser processing technology, and practical technology that is in close relation to enterprises. We will also introduce the situation of the manufacturing industry in China and Japan, the development of laser processing technology in China, so and so forth.
All in all, AIFC 2011 is the first independent exhibition of Amada where we present to China all the commodities we are selling, as an "integrated manufacturer of metalworking machinery".
CMJ: You have expressed in different occasions that Amada will strive to expand its business in the China market. What are the reasons behind this?
Mr Takagi: The China strategy is an important part of Amada's strategy in emerging markets. In July, our management announced its strategy in the China market in the coming three years. We target to raise our sales to 50 billion yen by 2014, which represents an increase of 230% compared with 2010. We also target to raise the percentage of the China market in the headquarters' sales to 17%, a double from 9% in 2010.
After the financial crisis, China, India and other emerging markets have been recovering at the fastest possible paces, leading to high-speed growth. Since 2009, Amada's sales in the China market have soared. In 2009, Amada's sales in China were 11.5 billion yen, which rose to 15.2 billion yen in 2010. This represents an increase of 32%. For 2011, we estimate our sales in China to be 19.9 billion yen, representing an increase of over 30% again. Based on our good performances in China for the two years in a row, we determined to further increase our investment in China.
CMJ: What initiatives or actions have been planned?
Mr Takagi: In December 2011, we founded a regional company in Shanghai to be in charge of China business, with registered capital of 2.5 billion yen. We also plan to establish a new factory and technical center in Shanghai Qingpu Industrial Zone in 2013. The regional company also possesses product planning and development functions. It will be able to develop and manufacture products according to Chinese customers' requirements. It is to enrich Amada's product portfolio. Our new factory will involve an investment of 6 billion yen and will have a monthly capacity of around 120 units of punching machines, laser processing machines, bending machines, etc. Through these actions, we hope to achieve sales of 35 billion yen in China, which is a double of the figures in 2011.
CMJ: For the machines made in China, will they be supplied to Chinese customers or customers in other markets?
Mr Takagi: Our new factory and regional company are founded to let us stay closer to Chinese customers and serve them better. The products that we will produce in China will basically be supplied to Chinese customers. They are built to fulfill the requirements of the China market.
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