Going along the National Highway 104 in the northwest of Wenling, there are thousands of pump companies of all sizes on both sides of the road, stretching from the streets to the distance. The country’s largest pump and motor industry cluster is developed along this road.
Since the reform and opening up, private enterprises have been like a spark, turning Wenling into an important representative of China’s county economy. Pumps and motors are one of the “fruits” of Wenling’s “from scratch” and “from good to excellent” industries. This year’s annual output value is expected to exceed 70 billion yuan, and “100 billion” is in sight.
From a “grassroots” to a “top stream”, Wenling’s pump and motor industry has a glorious side. The output of small water pumps accounts for more than 70% of the national market and 20% of the global market. However, it also encounters difficulties in advancement. There are not enough large enterprises, the industry is in urgent need of upgrading, and some areas are still plagued by quality concerns.
As Wenling’s pump and motor industry moves towards a higher end, what shortcomings still need to be addressed?
Wenling Pump and Motor Industry Cluster Sharing Alliance·Wenling Photo by Xu Weijie
status quo
Mixed feelings
With more than 3,700 enterprises and 6 listed companies, Wenling pump and motor industry has a rich foundation. Looking at the development trajectory in recent years, it is an upward curve. From the first to the third quarter of this year, the output value increased by 11.9% year-on-year, and the average annual growth rate in the past three years exceeded 10%.
“The strong growth is the result of the resonance of domestic and foreign demand. Domestic water conservancy infrastructure is accelerating the replacement of energy-saving pumps, coupled with the active inventory replenishment cycle abroad.” Lin Bingyi, member of the Party Committee and deputy director of Wenling Economic and Information Bureau, said, but the fundamental reason is that after more than 30 years of development, Wenling’s pump and motor industry has continued to deepen product research and development, industrial agglomeration and advantage building, and the industry as a whole has achieved a triple jump.
First, scientific and technological innovation releases the multiplier effect.
In 2023, Wenling City released a list of “Pumps and Motors” projects. Aikesai Technology successfully won the bid for the “MEMS chip design and manufacturing process of pressure sensors based on glass micro-dissolution technology” project, which solved the current problems of “stuck technology, stuck cost, and stuck reliability” in the domestic pump and motor industry sensors. Relying on new products to “conquer the world”, Aikesai Technology’s sales this year increased by 30%. From January to October this year, the output value of new products of Wenling pumps and motors increased by 18.7%.
Second, the improvement of the entire industrial chain.
Luba Electromechanical is doing a “thankless task”, localizing the accessories, from controller components to bearings and even processing machine tools. These accessories can be fully equipped in Wenling in half an hour’s drive. “Many times, we have to communicate with suppliers repeatedly, such as the formula of liquid cooling and the selection of bearing materials. ‘Seeking hardship’ is to avoid being controlled by others.” Chen Jianli, head of Luba Electromechanical, said that the improvement of the process and matching of the upstream and downstream industrial chains has brought about the upgrade of the overall performance and stability of the products.
Data can best reflect the results. 8,000-10,000 hours is the trouble-free operation time that Chen Jianli obtained by tracking the flagship product, the variable frequency high-speed deep well pump, while the common high-speed pumps on the market are prone to problems after 5,000 hours of continuous operation.
3. Expansion of overseas markets.
In recent years, it has become a trend among Wenling pump companies to attend exhibitions around the world. “Every appearance is an opportunity to expand new customers, and no one wants to miss it,” said Wu Bin, a relevant person in charge of Puxuante Pump Industry. As of the end of October, 414 companies in Wenling participated in 172 various overseas international exhibitions, and the foreign trade output value increased by 11% year-on-year. Wenling also reaped a lot of rewards at the Canton Fair that just ended. General machinery and mechanical basic parts products were the main force of transactions, with an intended transaction volume of more than 210 million yuan, accounting for more than 40%.
The triumphant march is not the whole story. “Output value is growing steadily, but profits are slim,” entrepreneurs complained more than once during the visit. “Especially in the low-end red ocean market, homogeneous competition is severe and price wars are fierce.”
Zhengli Electromechanical Production Workshop Sharing Alliance·Wenling Photo by Xu Weijie
Shortcomings
Complete one by one
“In 2024, the Chinese water pump market will be worth about 236 billion yuan, of which Wenling accounts for about one-third. However, the investment in scientific research does not match the scale of the market.” Zhang Jinfeng, deputy secretary of the Fluid Machinery Engineering Technology Research Center of Jiangsu University, bluntly stated that advantages such as a complete sales network and the world’s largest raw material base have lowered the entry threshold for Wenling’s pump and motor industry. Problems such as generally small enterprise scale, low brand added value, and weak independent innovation capabilities have gradually surfaced.
The head of a leading pump company emphasized the harm of “false labeling”. “False labeling” generally means that the actual parameters of the product do not reach the marked values. “‘Falsely labeled’ products have lower prices, which will impact normal companies, especially second-tier companies, and will lead to a decline in profits, which will in turn affect subsequent technology research and development investment, making it difficult for companies to continue to move up. In the long run, bad money drives out good money,” he said.
This is a thorn in the side.
“Submersible pumps are the hardest hit. In August, we issued a group standard on ‘false labeling’ of submersible pumps.” Ye Qiaowei, secretary general of the Wenling Pump Industry and Motor Association, said: “This will help provide a basis for law enforcement agencies.”
In recent years, Wenling Market Supervision Bureau has taken a series of effective measures to protect the intellectual property rights of the pump and motor industry. For example, the construction of the national-level Wenling (General Machinery) Intellectual Property Rapid Protection Center can pre-examine product appearance patents and improve the efficiency of examination. Another example is the patent navigation project, which allows companies to benchmark international companies through patent navigation to avoid patent infringement risks when going overseas.
Small and medium-sized enterprises are weak and it is difficult for them to attract talent and master core industrial technologies when fighting alone. They need help from the government.
National Pump Product Quality Inspection and Testing Center (Zhejiang). Photo by Xu Weijie, Wenling, Sharing Alliance
Relying on platforms such as the Pump Industry Innovation Service Complex, Wenling Collaborative Innovation Center for Mechanical and Electrical Engineers, and the Pump Industry Town Technology Center, Wenling has jointly built the Wenling Research Institute with Tsinghua University, Jiangsu University, Zhejiang University Taizhou Research Institute, Zhejiang University of Technology and other universities and research institutes to provide one-stop innovation services for pump companies. It has solved 94 pump technical problems, cooperated in the research and development of more than 200 pump projects, and generated service revenue of nearly 200 million yuan.
The low, medium and high pressure full coverage lightweight vehicle-mounted fire pump jointly developed by Puxuante Pump Industry and Jiangsu University has expanded its operating range by more than 25%, overcoming the technical difficulty that the existing hydraulic design methods cannot meet the requirements of variable operating conditions without overload operation. The new product is expected to be launched on the market early next year.
Jinyue Mechanical and Electrical also reaped the benefits. Empowered by industrial design, its medium and large oil-immersed submersible pumps stood out in the market, allowing the company to break away from low-end homogeneous competition. Its annual output value has grown by more than 10% for two consecutive years.
At the end of August, the National Pump Product Quality Inspection and Testing Center (Zhejiang) successfully passed the acceptance. Here, there are 23 high-end laboratories, with testing capabilities covering more than 95% of water pump products and 90% of the main supporting products of water pumps, gradually forming a service chain of “testing-research and development-industrialization”. In particular, the “self-priming performance test at different heights” and the water pump test device under the “EMC, low noise, swing, vibration” environment are used for the first time at home and abroad.
“Develop new quality productivity according to local conditions. Manufacturing industry needs time to grow.” Zhang Jinfeng said that simple tracks are often very competitive. It is better to be a long-termist and stick to the difficult track. Leave the answer to time. The market will make a choice. After the great waves, high value-added enterprises will stay, and the industry will gradually concentrate on the top.
Change is happening, and it is a good trend.
Breaking the Boundary
The road to success
Looking around the world, leading companies are not limited to pumps, but focus on integrated layout. For example, as a global leading supplier of fluid equipment and services, Flowserve provides not only pumps, but also a complete product portfolio of seals and valves, providing overall solutions for industries such as power and petroleum.
In order to consolidate their advantages and maintain their market share, it is also common for leading pump companies to carry out horizontal and vertical mergers and acquisitions. For example, Wilo acquired the Canadian pump company PLAD Equipment; and ITT of the United States acquired the Danish marine pump company Svanehoj.
The experience gained from other places may provide some help for the development of Wenling’s pump and motor industry.
“If the industry wants to break through and move forward, it must break the boundaries between agricultural pumps and household pumps, promote the restructuring and upgrading among leading companies, and expand into high-tech fields such as industrial pumps and aerospace.” Lin Bingyi said.
Leading companies are quietly unlocking new scenarios.
Leo Production Workshop Sharing Alliance·Wenling Photo by Xu Weijie
LEO Zhe Pump has provided safe and efficient pump and system solutions to more than 500 million users in 150 countries and regions. Its products are widely used in many fields such as construction, municipal administration, agriculture, household, gardening, etc. In 2022, the smart water solution for the Qatar World Cup was provided by LEO, ensuring the water needs of fans during the event.
Xinlei air compressor has entered the “magnetic levitation” track, and its products have entered multiple fields such as industry and rail transit. “Compared with traditional centrifugal units, magnetic levitation variable frequency centrifugal chillers (heat pumps) eliminate speed-increasing gears and adopt high-speed permanent magnet synchronous motors, motor direct drive and other technologies to achieve ultra-high energy efficiency and oil-free maintenance, with an energy saving rate of 50% and full-cycle maintenance costs saved by more than 60%.” said Zhong Jiayu, general manager of the company. Xinlei Co., Ltd.’s 2024 third quarter report shows that the company’s operating income in the first three quarters was 660 million yuan, a year-on-year increase of 55.23%.
According to a research report released by Guolian Securities, in the past, leading companies such as Leo Group, New Territories Pumps, Dayuan Pumps, and Taifu Pumps mainly produced basic models such as household pumps and agricultural pumps. They are currently gradually breaking through into the mid-to-high-end market. For example, Leo Group and New Territories Pumps have successively deployed stainless steel vertical pumps; Dayuan Pumps has expanded household shielded pumps to the industrial field.
According to the data from the ranking website, the top three brands in the domestic water pump market are still occupied by foreign brands such as Wilo, Grundfos and Xylem, but local brands such as New Territory Pump Industry are gradually emerging and entering the 3-10th place.
“Obviously, domestic leading companies are entering the mid-to-high-end market, and the competitive landscape is being optimized. This is a challenge as well as an opportunity.” Lin Bingyi said that at the government level, Wenling is also promoting industrial transformation through industrial investment and fund investment, such as attracting Shanghai Electric’s low-voltage motor project.
Lin Bingyi mentioned an interesting detail: in the 1990s, the story of Xinjie Pump Industry smashing 60,000 yuan worth of substandard parts with a sledgehammer was talked about with great relish, and the key word at that time was “qualified”. Now, the high-frequency words on the lips of CEOs have become “permanent magnet motor”, “clean energy” and “new quality productivity”.
It is undeniable that the rapidly rising Wenling pump and motor industry still has a large gap with the top position in the global market, and it will take some time to catch up. However, both from the enterprise side and the government side, it reveals the determination of the industry to sprint to a higher level.
This is the market’s choice, and perhaps also the city’s choice.
Post time: Dec-04-2024