At last year’s bauma China, we had a chance to talk to Mr. Mario Scolozzi, Far East Country Manager, Wire Rope Division from Redaelli Tecna S.p.A, to find out the company’s view on the markets and future opportunities.
LRW: We realize that the market for offshore in Singapore goes down a lot. Does the Chinese market for offshore fare any better?
Mario Scolozzi: The market in China is still quite good compared to the rest of the world, especially concerning offshore. Chinese shipyards’ production will not go down much because of two main reasons. First, they must give jobs to the people. Second, many of the Chinese shipyards are now producing ships for the Chinese government. These include building pipeline vessels, or salvage vessels. For example, there was a new salvage vessel being built for the Shanghai Salvage Bureau. Chinese government is planning well and uses this opportunity to modernize the national fleets of pipeline vessels, offshore barges, and this kind of vessels.
LRW: What is your coming plan for Redaelli in China for 2017?
Mario Scolozzi: Our coming plan for China is to keep our market position, to remain really strong among wire rope manufacturers for big projects. Now at least 70% of our ropes are for offshore projects. Meanwhile, keeping our position in other sectors like mining, industrial hoisting.
One sector we especially emphasize is supplying ropes for ship lifts for the dams in many hydro power stations in China. We would like to keep our strong leadership in this field. We have been supplying for ship lifts in the last few years. Projects include Tingzikou in a couple years ago, Pengshui and Goupitan in 2016. These are very big projects and they can make difference for the results of our company every year.
LRW: Redaelli is doing very good for the last few years, what do you think are the advantages of Redaelli doing so well in China?
Mario Scolozzi: I think the first reason is the price. We are a western manufacturer, worldwide recognized, but we also have very good price. Due to the fact that our factory is in Italy, our costs are relatively lower compared to Germany or other economies in Europe. This is a big advantage.
Second, I think that is our flexibility. Because we accept pricing level, margin level, or contractual terms that many other western manufacturers normally would not accept. So we are very flexible with our Chinese customers.
Another good reason for our success is our good Chinese team. We have personnels who are taking good care of our Chinese customers. Chinese customers are often very demanding in terms of questions and enquires. We can answer their questions very fast. This kind of availability is highly valued by our customers. For them we are like a family that we are always there. Not in any case that we do not reply or we reply in two weeks’ time. We give our customers feedback maybe in half an hour.
LRW: What do you think about the development of machinery industry and crane industry in China?
Mario Scolozzi: This is our third time exhibiting at bauma China. The exhibition is very busy and there is a big affluence of people. From this perspective, the market is not so bad for industrial applications. On the other hand, albeit of economic crisis, more people want to understand what’s going on, what the new trend is and what the possibility is for the future. So more and more people come here, some are from the sector, some are not from the sector. They want to understand if they can establish business in this kind of sector. So I would say we see a lot of interest in industrial hoisting. Since Redaelli mainly targets for big projects, we have not been affected much by the economic downturn for the past years.
Crane market in China now is not worse than two years ago. In the past few years, Chinese manufacturers produced a lot of cranes, they have stocks that they could not sell. Now part of these extra production that were not sold to the world market, were probably absorbed by the domestic Chinese market. And large portion of these cranes have been sold. So I think that even though the worldwide market maybe worse than two years ago, and at the moment, the Chinese market for crane application may not be optimum, it is more healthy than two or three years ago because the oversupply of cranes has largely been absorbed.
LRW: You are responsible for the Asia Pacific markets, what do you think are the differences between Chinese market and the Asia Pacific markets?
Mario Scolozzi: Japanese market is somehow difficult for us to penetrate. Japanese companies are very conservative. They have 8 or 9 rope manufacturers. While they do not have many new building projects going on, they don’t have very big offshore industry and there is little mining industry. In reality, their market is mainly industrial, but Japanese industries are not as active as before. Japanese market for us is almost out of the games.
Korea is also not an active market for us. Korean shipyard in the last 10 years, especially in last 5 years lost a lot of positions when Chinese shipyards became more capable of production. Korean shipyards mainly produce FPSO, but these projects for FPSO nowadays are really few. And still, there are some big steel wire rope manufacturers in Korea. But for us the market there is better than in Japan.
Singapore is the hub of engineering departments for many oil and gas businesses in Asia. But nowadays the sector is nearly collapsed because the market suffered a lot from the downturn of offshore industry. Due to the fact that the headquarters of offshore companies are mainly in Europe and the US, when these big oil companies have to make a cut to the personnel, they prefer to do it worldwide. They make the cut more in Asia than in Europe, because somehow they try to protect their core business. Singapore is really in bad shape. I’m sure in one year or after one year, the market will find their new equilibrium. May be not like two years ago, but there will be business going on again.
China is unique in its kind because the country is super big. There are a lot of demands. If a market sector goes down, another sector may grow bigger. The Chinese government, as we see it, is still assisting the economic growth strongly. China is still developing, and with such a large territory and so many industries with vast potentials, there will never be a downturn like from 100 to 0. Any slow down will always be well calculated by the government. So I still think China will be a positive market for us, for the coming 10 or 15 years at least.