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President of ZPMC Guan Tongxian: The leading enterprise of port machinery covets new territory
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2009-6-1 15:36:46
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Why does ZPMC have energy to protest against CNN? Why does ZPMC deal with the financial crisis calmly, maintain the steady growth when the crisis is most serious? Why do ZPMC''s workers dare to resist the pirates who have automatic rifles with crudest frangible grenade? Before we answer these questions, we would better know a person who is the founder of ZPMC first, his name is Guan Tongxian.
For an entire year, ZPMC was surrounded by the spotlights.
On April 18, 2008, an open letter which was signed "40,000 staff of ZPMC" was published in the home page of ZPMC¡¯s website to show their indignation to Jack Cafferty (commentator of CNN). The open letter took the truth that products made by China ZPMC are already used in the main ports of USA on both the East and West Coasts as an example, warned ¡°CNN, if you dare to clamor the Chinese product is ''trash ''once more, we will hire attorney in the US to sue you immediately by the libel¡±. ZPMC became the first Chinese company that protested against CNN''s offensive remarks. Innumerable Chinese netizens were inspired by the open protest.

One woe goes and another comes, ZPMC''s workers became the hero of resisting the Somali pirates. On last December 17,''when'' Zhenhua 4" ship  was passing through the Gulf of Aden, Somali pirates appeared and attacked the ship, the pirates climbed the main deck, in this precarious situation, the crew acted calmly and beat back the pirates after a-5-hour confrontation, protected the lives of themselves and the ship. This feat became the focus of global public opinion at that time. In the past year, the financial crisis was more and more serious, many multinational and financial magnates were suffered seriously strike, a lot of companies were trusted by the government or even forced to file for bankruptcy , most Chinese export companies were faced with grim challenges. But ZPMC was actually an exception. Although its products are mostly manufactured for export, ZPMC realized the rapid growth instead of decline in 2008.  According to the annual report on April 9 this year, the profits of ZPMC in 2008 year exceeded RMB 2.55 billion Yuan, increased by 22% over last year.

59-year startup
Guan Tongxian founded ZPMC in 1992 when he was already 59 years old. He went into business from the ministry of communications, from Beijing to Shanghai.His first half of life before then is rough. He does not want to mention the past. Guan Tongxian takes the days after 1992 as the best time of his life. That year Guan Tongxian leaded about ten people including designers, quality managers, production and marketing department staff from Shanghai Port Machinery Company, rented several offices that clung to the SPMC. That''s it, Guan Tongxian started a difficult venture when he was nearing the age of retirement, and also he opened the way of conquering the world port machinery. At the beginning of ZPMC was founded, Guan Tongxian made a pledge: Any important ports in the world, where there are container handling operations there should be Chinese container machinery.  Although 17 years later, the goal has been a reality, but At that time, few people can believe this goal to come true. In the early 1990s, most of the world''s port machinery orders were in the hands of large companies from Japan, South Korea, the United States and European, also Chinese ports almost used foreign equipments. The core and key technologies were held by foreign giants. The design ability and production level of the local manufacturers were extremely low, the products were even inferior to foreign eliminated goods. But Guan Tongxian never believes that. The end of 1992, Vancouver port needed a container crane, new-born calves make little of tigers, and ZPMC got the bid with the low price and the commitments of after-sale services. Guan Tongxian recalls that at that time there were many multinational companies such as Mitsubishi Heavy Industries, Mitsu, Krupp, Nore, Samsung, Hyundai etc, these companies  occupied of 95% world market, but ZPMC was just founded, no prominent achievements, only fourteen employees and one million dollars, in addition it comes from a country where port machinery mainly depends on imports. It is not easy to get today''s achievements. ZPMC produced the first crane like a handicraft, that any important components they could not make it better only adopted world-famous products. So the first bid did not bring much profit for ZPMC, but good reputation. In the following years, senior colleagues of other countries had one big headache: no cheap labor, worst of all, ZPMC could imitate; copy and improve their products in the area of container machinery of which the production technologies and production methods were known to all. No one can refuse good bargains. Vancouver bought a device from ZPMC in 1992. Miami port ordered four sets of products in 1994, ZPMC entered the U.S. market. Since then, we can see the ZPMC in each bid of port machinery. From the rookie to the leader, it is not too long. In 1998, ZPMC exceeded all competitors and became the leader of container machinery by 1/4 market share. This year early, the market share arrived 78%.

Innovation and employment
In July 2008, Euromax which is the most advanced and the largest automatic container terminal in the world was opened to service, Rotterdam port held a ceremony, invited more than  1,400 honored guests of worldwide Shipping and port industry.  The automatic container terminal has throughput of 2.3 million TEUs ability, only needs 50 workers. There people saw ZPMC''s nameplates everywhere, they knew such a high degree of automation was inseparable with Chinese. Yes, total value is more than 2 billion euros, 76 sets of automation equipments: 16 container cranes, 58 DRMG sets, 2 railway cranes are all produced by ZPMC. 17 years ago, ZPMC needs to carry out price war with the advantage of cheap labor, but today there''s no need to. Rotterdam port chose ZPMC, refused an Austrian company whose price is lower by 5%-10%. "Because of that they pay more attention to the overall strength. Container crane has both characteristics of technology-intensive and labor-intensive. With the increasing capacity of container ships, shippers require tighter shipment; shipping companies require shorter time unloading, so they need more and more highly efficient container cranes." Guan Tongxian says.  The Rotterdam port considered it worth the money. ZPMC is able to do this because it is now the world''s container machinery on behalf of the highest level and the latest technology not only because of its original labor advantage but also technological advantage. A total of 29 of the world''s leading technology, more than 200 patents, all of these make Zhenhua Port Machinery occupy the world commanding heights of the development of container cranes. Not just innovation, the management personnel of President of ZPMC Guan Tongxian is also to be praised by people. When many enterprises think a lot of highly educated people, Zhenhua Port Machinery has been to "do not ask the source of the hero" as a criteria for employment. In the human resources strategy, President of ZPMC Guan with more ideas also has a "philosophical Zhenhua."Emphasis on academic qualifications is important but not only. In ZPMC¡¯s team there are two types of useful people, one is white-collar with some foreign languages and computers basic skills; the other is the people who has useful experiences without academic qualifications. Guan thinks that those up to few tens of meters, weighing hundreds of tons of port machinery can only be controlled by the second people. Retirement is not according to age. In ZPMC, people with healthy body and work ability will not retire if work need. In the enterprise do one big thing needs 5-10 years, if the 60-year-old should retire, what can the 50-year-old do something?" President Guan believed that the reason which ZPMC didn¡¯t waste too much effort is because of the old team of experienced staff which is closely related to quality. ZPMC turns a large contingent of migrant workers into industrial workers. ZPMC production line uses the 40,000 front-line workers which mostly are migrant workers. President Guan repeatedly said that although the education level of migrant workers is not high, they can work hard, Zhenhua can trains these migrant workers to skillful craftsman. At present, Zhenhua has thousands of people, the world''s largest welding workers.     Better wages and benefits reduce the smaller wage gap. Guan Tongxian said ZPMC has 4000 white-collar workers, and everyone¡¯s monthly income is more than 10,000 Yuan. 40,000 migrant workers can also get a monthly average close to 2,500 Yuan, so that even if the income of enterprises in Shanghai is also relatively high. It is worth mentioning that, in ZPMC, the incomes of all employees are more balanced, even if the company''s executives, the highest annual income is up to 350,000 Yuan, however, President of Guan¡¯s annual individual income can not even ranked in the company before the 5 . While employee don¡¯t pursuit high annual income, the company adopts the form of self-help groups when the workers suffer from serious illness, or purchasing house, or children in university such as large expenditures, and gives them necessary assistance or free loans and so on. ZPMC has many ideas and policies to encourage and motivate employees, in ZPMC, as long as you have ability and performance highlights, you can get high wages.

Aim at maritime heavy industry
Port Machineries are the first products of ZPMC, and they are also the main products now. However, as early as four or five years ago, Guan Tongxian had set his sight on the new field, the world''s port machinery hegemony hoped to explore new territory. President Guan had such a statement: "Person who met the owner of the current mineral deposits is a good for nothing, ZPMC will not satisfy with the existing market share of port machinery." "We want to make steel by steel and do big businesses via steel, while maintaining the bulk of port machinery and mechanical traditional business," he stressed that "the past two years we have been focused on developing new industrial areas, and we will target large-scale steel bridge and marine heavy industry markets, the latter will be our main direction of attack¡± In fact, the container market which ZPMC is good at is about four billion U.S. dollars market space, while ZPMC which occupies the 3 / 4 market share has be limited for growth room. However, maritime heavy industry is much more than 50 billion U.S. dollars, this market is a great imagination. Guan Tongxian said that the focuses of Heavy products are not aimed as a passing fancy, but they¡¯re after a well-thought-out and long-term thinking result. The first is a broad market prospect. As the current oil production development technology matures, there are more maritime heavy industry businesses about oil extraction in seabed. Global Maritime Heavy industry market value in 2007 had exceeded 300 billion U.S. dollars, but it will gradually increase over the next few years. "As the high barriers to this market, marine products have higher gross profit margins." President of Guan said that the gross profit margin in the maritime heavy machinery has been above the port machinery. Secondly, ZPMC¡¯s conditions are good. "The company has three manufacturing assembly base near water, Shanghai Changxing base is currently the main place nearly five kilometers long water operating space, and it has one million square meters light and spacious large indoor workshop¡¢ the large weight cranes and up to 3.7 kilometers long heavy load-bearing fine production conditions.¡± President of Guan claimed that this kind of production conditions is infrequent in the world. In addition, there is still a considerable R&D reserves in ZPMC. Today, ZPMC has been in the role. Guan Tongxian said the company has built the brand about the whole super-large floating crane products in the market, last year and this year there were 4,000 tons and 7,500 tons full-revolving floating crane and ultra-wide full-floating crane delivered to the customers who were Guangzhou Salvage Bureau and China National Offshore Oil Group. This is undoubtedly a living advertisement for ZPMC heavy sea-based future market. ZPMC maritime heavy industries market is likely to achieve a breakthrough in the near future, As far as reporter knew that a super contract with Iran had been in the late stage of the financial negotiations. President Guan believes that the reason why ZPMC could have a nice future in the maritime market is closely related to the good larger environment in Shanghai. "Shanghai can develop into a future world marine centers," he alleged, "One of the reasons is the good environment which could retain excellent people; Secondly, the climate is better than the Northeast or North China, it is more than three months of outdoor operation time in Shanghai; Thirdly, Good supporting what world-renowned ship inspection, certification agencies or general headquarters have offices in Shanghai. Several years later, specializing productive plants (such as the robot under water, drilling machines, etc.) will open the floodgates. " According to President Guan¡¯s ideas, ZPMC will get five billion U.S. dollars of market share in 3-5 years; the field of heavy industry at sea will reach up to 50% of ZPMC sales. For this reason, the company has recently submitted application to the forthcoming annual general meeting of shareholders to consider changing its name to "Shanghai Zhenhua Heavy Industry (Group) Company Limited."

Guan Tongxian who is the same as those years convinces that the maritime heavy industry market door which is dominated by those oversea multinational groups will be eventually opened by ZPMC at last in the near future.

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