Asian Trade Shows Reveal Focus, Unbridled Optimism
While South Korean builders continue to push more advanced technology, newcomers from China seem eager to sell in North America.
Tariffs and trade wars, not to mention combustible politics, make the world nervous. Nonetheless, testimony from many exhibitors at South Korea’s largest machining exhibition, the Seoul International Manufacturing Technology Show (SIMTOS), was tinged with cautious optimism.
Much of the reason for that optimism was encapsulated in the buzz of activity 300 miles away at an entirely different, overlapping exhibition, the China CNC Machine Tool Fair (CCMT). Although SIMTOS was well-attended, particularly steady traffic even in the latter days of CCMT evidenced the opportunity that characterizes manufacturing in today’s China. It’s likely that some of these eager attendees left the show with plans to install equipment from South Korean machine tool builders that were exhibiting simultaneously in both their home country and their largest overall export market.
The term “eager” could apply not just to the attendees, but also to the Chinese show’s exhibitors, which seemed imbued with all of the optimism but none of the caution of their South Korean counterparts at SIMTOS. This was the case even when it came to the prospect of selling in North America.
Many of China’s machine tool builders lack the established presence in the United States enjoyed by those from South Korea. Through these established partners and distribution networks, South Korean builders can offer technology that SIMTOS revealed to be faster, more precise, and more interconnected than ever, not to mention automation engineering and other expertise. Still, it was only in late 2016 that the nation reportedly emerged from a recession, and that the Korean Machine Tools Manufacturers Association (Komma) cited trade disputes, economic instability and myriad other concerns as threats to exports in its regular forecast (see page 11 of this linked PDF). In this context, testimony from SIMTOS exhibitors about their current global business (including their assessment of the North American market) could be considered rosy. As depicted in the slideshow above, these builders’ technology focus continues to align with the needs of North American manufacturing operations.
The mood at CCMT was different. Our small contingent from MMS publisher Gardner Business Media focused mostly on builders that did not already have a presence here. Although these companies face similar uncertainties and perhaps even greater export barriers as the South Koreans, many seemed undaunted by the challenge of penetrating a new market. “There’s no limit to investment in China,” summed up Ignacio Alfayate, general manager of Group Nicolas Correa Asia, about the business climate in the world’s No. 1 producer and exporter of machine tools. (Correa, a Spanish builder, recently opened a Chinese factory to produce machines with the same components and engineering employed in its home country.)
This isn’t to suggest that new waves of Chinese machine tools will arrive on North American shores anytime soon. Just as many exhibitors expressed little interest in our market, citing opportunity at home in China, lack of capacity and/or lack of technological competitiveness as reasons to avoid seeking profit so far abroad.
And yet, those who think differently—most of which exhibited in a pavilion consisting of mostly private companies—seem confident in their technology and future capacity, and they certainly do not see success in China as a reason not to expand further. Perhaps more notably, they also have more in common than unbridled enthusiasm. For instance, many seemed to understand the need for a long-term commitment and robust service capability to succeed in such a complex, competitive and geographically disparate market. They also recognize that the challenge for a Chinese company is as much about addressing misperceptions about technology as offering the right technology.
The most direct feedback along these lines came from Neway CNC, a brand already established on this side of the Pacific, particularly in the oil and gas industry. Reportedly, the company sold little in the United States before working hard to establish its presence and capability for service, and to demonstrate that “made in China” doesn’t always mean low quality (a goal shared by the Chinese state). Reportedly, this required selling very little in the first year or in order to focus on getting established, including setting up a showroom in Houston, Texas.
An example of Neway’s technology, and samples of a few other Chinese companies that hope to replicate its success, are highlighted in the picture gallery above, along with highlights from SIMTOS. How many of the CCMT exhibitors will replicate Neway’s seemingly deep, long-term commitment to this market remains to be seen. Regardless, North American manufacturing remains attractive enough at the moment to earn their attention, even in the face of a robust domestic market and potentially significant headwinds.