Bearing group with German technology remains driving force

A huge bearing plant owned by ZWZ Group (also known as Wafangdian Bearing Group Corp) is now working at full tilt and is expected to continue at that pace until 2018, according to company officials.

“Lower-end products lack competitiveness,” said Cong Hong, the chairman of the group. “But we are aiming at high-end products, and a global market.”

ZWZ acquired German-based KRW Leipzig GmbH in 2013, a firm founded in 1904 which owned global leading technologies and its products are now widely used in railway vehicles, machinery manufacturing and new-energy fields.

The Chinese firm has became a key supplier to Siemens AG, the German multinational industrial conglomerate.

ZWZ is China’s biggest bearing manufacturer and has become one of the world’s top 3 manufacturing bases of wind power bearings. It increased its exports by 61 percent during the first five months of last year.

But more significantly, ZWZ’s takeover of KRW Leipzig upgraded its technological development and service capability to handle more demanding overseas clients, said Cong.

ZWZ also started a research and development center in Detroit in the United States at the end of 2014, which he says now gives it the ability to meet “the strictest global technical standards and localized technical services for clients for the first time”, and challenge for new work, most crucially with some of the US automobile firms.

ZWZ had a 7 billion yuan ($1.08 billion) annual revenue and now employs 11,000 staff.

It has supplied some of China’s most high-profile projects, including the astronomical telescope near the South Pole.

“For various reasons, some specialized bearings cannot be imported, so as the country’s leading producer we have a responsibility to make them,” said Cong, who said the firm now manufactures nearly 3,000 types of bearings.

Established in Wafangdian in Dalian, in Northeast China’s Liaoning province in 1938, ZWZ is very much the cradle of the country’s bearing industry－the center of historical production that now extends to Harbin in Heilongjiang province, Luoyang in Henan province, and Yinchuan, the capital of the Ningxia Hui autonomous region.

The company claims to have provided support and assistance to more than 100 bearings companies in the form of staff, technology, and management.

“ZWZ and Wafangdian have contributed a lot to our country’s bearing industry,” according to Liu Baoqing, the deputy mayor of Wafangdian, a city unofficially crowned as “China’s Bearing Capital”.

Currently, Wafangdian boasts 636 bearing companies, with a sixth of those holding export licenses, with their products being sold to more than 80 countries and regions.

Liu believes the current difficulties caused by the economic slowdown both at home and abroad actually provide a great chance for the industry to restructure and upgrade.

“Those with less competitiveness will be phased out. But the cluster will grow stronger as a result,” he said.

Liu says the government is building public platforms to help local companies lower their costs on the purchase and storing of bearing steel, inspections and testing, sales and marketing, and financing.

In addition, the government is guiding small and medium-sized enterprises to put strong emphasis on staff training, innovation, and branding.

“Researchers and technicians are essential to the quality of products,” said Chen Qi, president of Dalian Kaitele Machinery Co Ltd, also known as KTL Bearings.

His company has employed experts from the United Kingdom and established a research institution for high-precision bearings in Wafangdian.

Its bearings for machine tool spindles occupy about 30 percent of the domestic market.

“All top 20 machine tool manufacturers in China are our clients, and last year we entered the European market,” said Chen.

Jiang Rui, general manager of Dalian Ruigu Technology Co Ltd, also emphasizes the importance of research. “Several years ago, when I visited the headquarters of SKF in Sweden, I was surprised,” she recalled.

“At its lab, they had already developed several new generations of the products that we were still using at that time.”

Ruigu has since become a best supplier of brass cages for SKF, and remains one of China’s leading producers of the cages. Statistics from the bearing industry association show the sector is facing severe competition and overcapacity.

In 2014, there were 1,622 bearing producers above the designated size, and productivity reached 140 billion yuan. The world’s top eight bearing manufactures have built more than 60 plants in China.

“Even though the bearing industry is facing severe difficulties, enterprises that do research in advance are running well-positioned,” said Jiang.