Chinese Spare Parts for Agricultural Machinery are Winning the Ukrainian Market

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A demand increase of the alternative spare parts in the Ukrainian market of agricultural machinery firstly is a result of two main factors: tendency of agrarians to optimize charges for repair in after-warranty period of agricultural machinery exploitation, and also achievements of some manufacturers of alternative spare parts of high quality/price ratio that did their offers the most actual on the market during the crisis period.

The management of the company ABA ASTRA the leader of original spare parts deliveries from the EU and the USA made a decision to explore the market of the alternative spare parts and to question Ukrainian agrarians in order to determine the best manufacturers, whose products had been already proved in the Ukrainian market and also had the best quality/price ratio. On the results of all events the company concluded a lot of contracts with new business partners on alternative spare parts deliveries in 2016.

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For purposes of new opportunities demonstration in the alternative spare parts market for Ukrainian agrarians we offer an exclusive interview with Jeanny Jow, who is the owner and the manager of the Chinese manufacture of alternative spare parts Ningbo. The interview has been prepared by Vitalii Mietolkin especially for IA APK-Inform.

Jeanny, please tell us some history about your business development. From what your business began and what is it today?

I am often asked why I do this business, which fits to a man more than to a woman. I always reply smiling that it was not an eventuality, but it was my dream all time. I was burnt in the ordinary farmer family and starting from the early childhood to become a good helper for my parents and to make their hard job much easier. I had made many efforts during many years for achieving my dream, but all they were unsuccessful, before I began to do my business in the foreign trading sphere. I started to export bearings successfully in 2001. Further being based on my good theoretical knowledge and acquired practical experience in mechanical sphere I could develop the assortment by adding transmission parts, chains, stars gears and belts.

In 2004 one my established customer helped me to orientate myself in the agrarian sphere, specifically in our products range development by adding quick-wear parts for agricultural machinery to our assortment. When I saw a modern harvester combine in a field the first time, I understood in a moment that it is the one I had been looking for during many years. Combines manufactured by JD / CLAAS / CNH / AGCO are able to free farmers from hard manual labor. They are the things of the future and I should concentrate all my efforts and to use all acquired experience and knowledge for manufacturing of the quick-wear spare parts for these combines.

From then onward I with great pleasure do business, about which I dreamed from my childhood, and it brings me not just moral satisfaction, but also good profit for the enterprise and for our partners from different countries all around the world. Even in 2005 the manufacture of quick-wear spare parts for combines became the main business direction. A new manufacturing integrated plant Ningbo Combine Machinery CO., LTD. was founded in 2006. In 2009 the business was expanded at the expense of investments into a new enterprise Industry Co., Ltd, which specialized on manufacturing of spare parts for seeding machines and cultivators.

In 2012 the business was expanded by investing into a new enterprise Gotech Machinery Co., Ltd.

Gotech - is a specialized, highly-technological center for manufacture, research work, development and sales of agricultural machinery. The main direction of the company activity is manufacture of highly-technological and specialized bearings for P5 and higher class export.

The foundation of successful work in the international market includes the following: our professionals of the R&D (Research and Development) department, highly-technological equipment and specific quality control system. In the factory there are fully equipped manufacturing lines as follows: heat treatment, procession on turning lathes, grinding and assembling department. We created and improved measuring rooms, physical and chemical laboratories, which are equipped with advanced hardware for raw and products examination: hardness tester Rockwell, harness micro tester Vickers, metallographic analyzer, profile meter, roundness probe and etc. It provides system and stable process of raw and products quality control strictly in accordance with T516949.

The production volume of the company Gotech Machinery Co., Ltd. increases constantly, and at the present time its annual manufacturing volume is 300 thous. of complete sets. We manufacture all types of small, middle and large precision bearings (the minimal inner diameter is 10 mm and the maximum external diameter is 500 mm). In 2014 Gotech got qualification assessment of European agricultural engineering and became a certificated manufacturer of bearings for agricultural machinery of the highest quality level.

Our business today is a group of modern, dynamically developing manufacturing enterprises, which specialize on spare parts production for combines, seeding machines, cultivators, harrows, transmissions of such famous brands as John Deere, Claas, New Holland, Case IH, Massey Ferguson, Maschio Gaspardo, Laverda, Welger, Lemken, Great Plains, Kinze, Vaderstad and etc.

Our products are delivered into 68 countries of the world. The geography of our supplies is as follows: Europe 60%, the USA 20%, Africa, Asia and other countries 20%. We highly appreciate our international communications and are in constant contact with our partners, we are interested to react quickly on their offers in order to provide and to find quickly the best solutions for joint business development with the most demanding clients.

Besides we develop the direction of OEM manufacture and always invest into the program Select Partner, building mutually beneficial relations with other factories for further improvement of our deliveries and quality system control.

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Please tell us about the products categorization. Do you manufacture products of high and middle quality? How does it influence on the production price?

- We are focused on spare parts manufacture just of the highest quality in order to substitute by them original spare parts; quality level is the same, but the prices are lower. Our products prices depend just on orders volumes.

What opportunities do you have for this ambitious target achievement? What raw do you use for the spare parts manufacture? What equipment is available for the production and the products testing? And however at which systems are your manufacture and products certified?

China today is the biggest consumer, manufacturer and exporter of metal. The largest and the most advanced enterprises specialized on different types of steel and other raw production. We do not have a necessity to purchase metal from other countries and to pay logistics charges. All we need for the high qualitative products manufacture we purchase at the lowest prices receiving very high quality. For different products we use different materials such as: carbon steel, chromed steel, borate steel, spring steel, casting and etc. Our manufacture is equipped with modern machine-tools (2014 YOM) and with equipment for raw and ready products testing.

Our manufacture and products have ISO9001 and JDS223 certificates.

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Jeanny, let try once again to outline the main advantages, which allow you to provide a high quality/price rating of the products:

1.The manufacture is equipped with the most advanced tool-machines and testing devices, by which efforts high productivity and high quality are achieved;

2.Metal and other raw, which are used for manufacture, respond to the highest quality requirements and are purchased at low prices from the domestic market;

3.Payment for labor in the products cost price is approximately 10%, while the same parameter achieves 35% in other countries;

4.The manufacture and the products have ISO9001 and JDS223 certificates, which correspond the international norms and guarantee access to the world markets;

5.The deliveries geography and the power distribution network all around the world allow to be informed about all novelties, to react quickly on demand and proposition of consumers;

6.The high level of international cooperation, the OEM-manufacture and the Select Partner program assist in constant improvement of the delivery process and of the quality control system.

Exactly. But some clauses more should be added, they are as follows: the state support on export stimulation, such as cheap bank credits and dotations, tax benefits and so on.

They are our main advantages, thanks to which we increase our turnovers annually.

And now let me ask you a counter-question: Vitalii, how did you know out about us and how did you effect your researches?

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Firstly we analyzed in details lots of big tenders on spare parts purchasing, which were done by Ukrainian agrarians in 2015. We outlined positions in invoices, which were cheaper than competitive ones, determined manufacturers of that nomenclature and questioned technical specialists of those agricultural companies referring quality/price rating in comparison with another manufacturers of alternative and original spare parts. The economy was inside of several manufacturers, among which your company was.

Secondly we attentively analyzed European market and were pleasantly surprised that authoritative operators (hub stations, distribution and consolidation warehouses and packers) successfully sell your products in the European spare parts market. Your spare parts often are delivered to the market under brands of those customers that is the world practice.

We understood that we have opportunity to expand our assortment at the expense of already checked products not just in the Ukrainian market, but also in the whole world. Moreover deliveries would be direct from manufacturer that is very important. Also the prices and the delivery terms fitted us as the minimal ordering quantity could be one pallet and for the delivery we were not obliged to spend time to prepare a big order for full container loading. It allowed us to make a decision to purchase the first samples consignments this year.

Vitalii, thank you for the information and the deep analyzes. We work in the Ukrainian market starting from the year 2007 and we are very glad to meet new clients. We highly appreciate opinion of every new customer and we are interested in long-term cooperation.

Jeanny, thank you too for the interesting conversation. I wish you effective cooperation with partners and prosperity for your business.

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Interviewed Vitalii Mietolkin,

Coordinator of the working group on cooperation with manufacturers

of alternative spare parts, ABA ASTRA, Ltd.

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