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　　Liebherr Press Breakfast

　　at Bauma China 2010

　　November 24, 2010

　　Liebherr in China: Activities of the Group

　　and exhibits at Bauma China 2010

　　presented by

　　Dr. Stefan Gilch

　　Managing Director

　　Liebherr Machinery Service (Shanghai) Co. Ltd.

　　Shanghai (P.R. China)

　　Ladies and Gentlemen,

　　I will now give you a short introduction to our development and business activities in China and will then focus on some of the product exhibits here at the Bauma China 2010.

　　As Winfried Boehm mentioned already, China is our largest Asian market in terms of turnover, and we regard it as one of our top future markets. As all of you know, China has seen a dynamic development during the last years. GDP growth was never less than 8 % during the last ten years, and even during the worldwide economic crisis it never dropped to any significant extent. Consequently, our Group could increase its turnover in China even in the crisis year 2009 by more than 50 % or 75 million Euros to 215 million Euros. A strong growth stimulus came by the way from the construction machinery divisions. In this year expansion of the Chinese economy, including Hong Kong, is again forecast to reach about 10 %. We are expecting another growth in turnover in the Chinese market accordingly. The upward trend of our Group in China is fuelled by intensified sales and service activities as well as significant investments into our China organisation, which I would like to talk about now. The Liebherr Group currently operates six wholly foreign owned companies and one joint-venture in China. Together, these companies employ a workforce of about 800 people (10/2010). We are selling products from almost all our divisions in China, including the areas of earthmoving and mining, mobile cranes, construction cranes and mixing technology, maritime cranes, components as well as aerospace and transportation systems.

　　Just to give you an example of how diversified our activities in China are nowadays, let’s have a short glance at our aerospace and transportation systems division. The Liebherr Group supplies air management, flight control and actuation systems as well as landing gears in the aviation equipment area. In the transportation systems product area the division develops and manufactures air conditioning and hydraulic actuation systems as well as electronic components for rail vehicles of all kinds. During the recent years, these activities have seen dynamic growth in China. For example, Liebherr supplies the air management and landing gear systems for the Chinese ARJ21 regional jet, and also contributes to the new Chinese C919 single-aisle aircraft. For this, the largest passenger aircraft so far developed in China, we will supply the air management and complete landing gear systems, too. For the manufacturing of these systems we started co-operations with Chinese partners, namely the Nanjing Engineering Institute of Aircraft Systems (NEIAS) and AVIC Landing-gear Advanced Manufacturing Company in the province of Hunan. In the transportation systems sector we run a joint-venture in the City of Zhuji in Zhejiang province. The air conditioning units manufactured by this company are for example on board of trains of two metro lines in Beijing and will be integrated into the trains of the future Mumbai metro line.

　　But now let me talk about our construction machinery business here in China. Our Group sells and services a broad range of construction equipment in the local market. The construction equipment product line for Chinese customers includes hydraulic excavators, foundation equipment, duty cycle crawler cranes and wheel loaders. Furthermore we sell mobile and crawler cranes as well truck mixers, mixing plant and tower cranes to Chinese customers. Another growing area is the material handling equipment, which also contributes to the turnover of our construction equipment divisions.

　　Sales and service activities for this machinery except for mixing technology, duty cycle crawler cranes and foundation equipment are coordinated from Liebherr Machinery Service (Shanghai) Co. Ltd. The infrastructure in Shanghai is our central service base supporting a nationwide dealer network. Liebherr Machinery Service (Shanghai) Co. Ltd. also operates an office in Beijing selling earthmoving, cranes and mixing technology products. Other Liebherr sales and services bases are located in Chengdu and Shenzhen. They provide support for users of mixing technology products in Western and Southern China.

　　Liebherr (HKG) Limited is another Liebherr subsidiary. This company promotes sales of duty cycle crawler cranes, crawler cranes up to 300 t and foundation equipment as well as a broad range of maritime cranes in China through its Hong Kong and Shanghai offices. Liebherr (HKG) Limited is also responsible for assembling and servicing of duty cycle crawler cranes in its own workshop.

　　Liebherr operates two production sites for construction machinery in China, one in Dalian, Liaoning province, and one in Xuzhou, Jiangsu province.

　　Liebherr Machinery (Dalian) Co., Ltd. includes a built-over area of 19,000 m². In this plant up to now we have been manufacturing crawler excavators for the Chinese market. The production program has recently been extended to wheel loaders and is intended to be further expanded in the future. But let me talk about that later. Within the Liebherr Group, the Dalian site serves as central manufacturing base for a number of emerging markets. We started our activities in Dalian six year ago by transferring our 4-series hydraulic crawler excavator technology to this plant. During the last years we have continuously upgraded the excavator models in the 23-t- and 25-t-class to the new 6-series technology featuring a Tier 3 engine, making them popular earthmoving machines in China.

　　As further step and in order to extend the product range, Liebherr Machinery (Dalian) Co., Ltd. now is introducing the wheel loader L556-II to the Chinese market. This machine matches the increasing demand for 6-t-wheel loaders, significantly reduces fuel consumption and improves cost efficiency. This year by the way has seen the production start of another machine in Dalian. By May 2010 we started manufacturing the Liebherr R 934 Material Handler at this site. This product is also exhibited at our booth this year.

　　The current development of our Dalian plant is very gratifying. In the 2010 business year we were able to increase the production program significantly. We will manufacture about 500 units at this site until the end of this year which represents the highest output since the opening of the plant in 2004. Only permanent investments make it possible to extend capacities and the product scope and at the same time keep a high level of product quality. In Dalian only in the year 2010 we devote approximately 2.1 Mio. Euros to new manufacturing equipment. Our policy of continuous investment in the production facilities pays off – the R 944 crawler excavator made in Dalian for example was awarded machine of the year in its class by the CCMA (Chinese Construction Machine Association) in 2010.

　　Our other Chinese construction equipment manufacturing company is located in Xuzhou, Jiangsu province. Xuzhou Liebherr Concrete Machinery Co. Ltd. is responsible for the production of high-quality truck mixers and mixing equipment. The production facility covers a built-over area of 14,000 m². This production site, too, has seen a positive development. We have been increasing the output since last Bauma China (2008) continuously. This year, we will be manufacturing more than 1,100 units at this site and we are optimistic that the growth course will continue: The twelfth five-year plan of the Chinese government which – as you know – runs from 2011 to 2015, will contain again significant infrastructural measures that will offer business opportunities to all construction machinery manufacturers.

　　Ladies and gentlemen,

　　We are strengthening our presence here in China by continuously extending our sales and service organisation and by investments in our local production facilities. While doing so the issue of intellectual property rights has gained particular significance in recent years. Please let me point out that our industry is driven by technology which makes the protection of intellectual property vital for existence. A fruitful economic base for investments can only be offered by rewarding company investments for innovation. Liebherr is watching very carefully the development in this respect here in China but also overseas. As the protection of IPR is of increasing importance for all Chinese suppliers of construction equipment, we do sincerely encourage all companies in our industry to monitor and strengthen the IPR protection.

　　Please let me now come to our exhibits on display at this year’s Bauma China that feature many innovative technologies. I will emphasize on the product ranges of earthmoving, mining, duty cycle crawler crane and mixing technology. Subsequently my colleague Christoph Kleiner will take the part to provide you with the latest information from the Liebherr mobile crane division.

　　The earthmoving and mining division is the biggest product division within the Liebherr Group employing a workforce of more than 9,000 people. The divisional controlling company is Liebherr-EMtec GmbH in Kirchdorf/Iller, Germany. The division’s product range includes wheeled and crawler excavators, crawler tractors and loaders, pipe layers, telescopic handlers and wheel loaders. It also includes mining equipment such as mining trucks and mining excavators.

　　As I already mentioned before, at this year’s Bauma China we are proud to present the first Liebherr wheel loader which has been built in our Chinese manufacturing plant in Dalian. In cooperation with the European competence center for Liebherr wheel loaders in Bischofshofen, Austria, the new L 556 II has been specially developed to satisfy the needs of the Chinese market. At the same time being “Engineered by Liebherr”, it complies with our globally high standards. The machine will also be available for certain defined emerging export markets.

　　The L 556 II has an overturning load limit of 12,900 kg and is supplied as standard with a 3.5 m³ shovel. Its service weight is then just under 17.4 tons. It is powered by a 140 kW (191 hp) diesel engine. The high discharge height and compliance with Liebherr’s typical quality and design standards make this wheel loader ideal for even the toughest operating conditions. An extensive range of equipment is available to suit the work being performed and the customer’s needs. The L 556 II’s efficiency, productivity and high safety standards offer the user further operating benefits.

　　This wheel loader’s hydrostatic travel gear makes a special drive-train layout possible: the diesel engine and other drive-train components are installed transversely at the rear and therefore act as a natural ballast weight. This increases the wheel loader’s stability and resistance to overturning, so that exceptionally heavy loads can be moved although the service weight remains low. The L 556 II is also very economical – its fuel consumption is as much as 25 percent lower than comparable models from other manufacturers. The self-locking braking action of the hydrostatic travel gear increases safety on steep slopes and keeps service brake wear down to an absolute minimum. The absence of wheelspin thanks to continuously variable traction control reduces tire wear by as much as 25 percent. Starting in April 2011, the L 556 II will be available from selected Liebherr dealers in China.

　　Further exhibits from our Dalian plant are the crawler excavator R 916 and the material handler R 934 B which I already mentioned before.

　　The new Generation 6 crawler excavator R 916 provides everything that is needed for economical excavation. Its operating weight is 24 t and it provides an engine output of 115 kW (157 hp). Attachments include a 5.7 m monobloc boom and the choice of either 2.4 m, 2.7 m or 3.0 m stick. The two-circuit, Positive Control hydraulic system quickly provides the oil flow required by the crawler excavators without the consumer units significantly affecting each other, and with optional power utilisation.

　　Tests have shown that the fuel consumption of the R 916 crawler excavator is 10 % less than the previous generation of machines.

　　From our extensive range of specialist excavators for materials handling, the Dalian-built R 934 B Litronic is on display here in Shanghai. For this machine on one hand emphasis was placed on an exceptional material handling performance, resulted via the unique interplay of the Liebherr-developed core components including diesel engine, hydraulic cylinders, working pumps and hydraulic motors. Furthermore, the development focus was also on ease of operation and maintenance. Access to the maintenance points is exemplary and time-saving. Due to an extensive range of rigid cab elevations and a hydraulic cab adjustment, the operator is provided with constant, optimum view of the material being handled.

　　Before I come to introduce you to our biggest excavator exhibit here in Shanghai, I would like to point out the increased importance of our activities for the mining industry in China. In the mining shovel size class of 300 tons operating weight, Liebherr meanwhile assumes the position of market leader in China. Our future expectations for the sale of mining equipment in this ever growing market are very optimistic.

　　The mining excavator R 984C – which we have on exhibit here in Shanghai – has also been very successful in the Chinese market. With the best breakout and penetration force in its class, this 120-tonnes machine operates particularly quickly and reliably, even under the toughest operating conditions. It features a working attachment which deals with all occurring forces ensuring safety and long life expectancy. The well-balanced kinematics of the R 984 C allows the highest possible reach heights and digging depths and ensures a maximum bucket filling potential. The R 984 C is equipped in its standard versions with a 7 m³ or a 7.7 m³ bucket capacity.

　　Another product on display at our booth is the duty cycle crawler crane HS 855 HD. This machine has been developed by Liebherr-Werk Nenzing GmbH and is assembled in Nenzing (Austria). The machines relevant for the Asian market are manufactured by Liebherr (HKG) Limited (Hong Kong). Both companies are part of the Liebherr’s Maritime Cranes division, which is also responsible for the Liebherr products ranges of lift cranes and piling- and drilling rigs. The HS 855 HD belongs to the 90 t lifting capacity class and features a superstructure with a robust and rigid box design which enables the HS 855 HD to work under the most severe conditions. The HS 855 HD is fitted with a powerful 450 kW (612 hp) diesel engine.

　　Please let me now introduce the exhibits of our construction cranes and mixing technology division to you. This division employs more than 4,000 people and its divisional controlling company is Liebherr-CMCtec GmbH in Biberach/Riss (Germany).

　　Our construction cranes and mixing technology division offers one of the world’s most comprehensive construction crane programmes and manufactures mobile and stationary mixing plant for the production of high-quality concrete, and also the truck mixers used for transporting it. Control and measuring equipment and recycling systems complete the product range. From the mixing technology product range we have the Mobilmix 2.25 batching plant and the two truck mixers HTM 904 and HTM 1204 K on display at Bauma China 2010.

　　The Mobilmix 2.25 batching plant was specially redesigned by the German engineering team in order to adapt to some special requirements of the Chinese market. The main components of the mixing plant are arranged on a supporting platform, which is transported in its entirety on a low-loader. The Mobilmix features an integral DW 2.25 double-shaft mixer from Liebherr that affords a high output rate of 100 m³ of set concrete per hour. Only one or two days are required to set up and commission the plant. Mobilmix ensures that construction sites can be supplied around the clock with different grades of high-quality concrete.

　　Furthermore, two truck mixers of Liebherr’s most recent generation are on display at our booth: Type HTM 904 with 9 m³ nominal content on 3-axles chassis and type HTM 1204 with 12 m³ nominal content on 4-axles chassis. The mixer drums are made of wear-resistant steel. Like all our truck mixers, these machines are easy to maintain and combine maximum benefit with long service life. Both mixers come from Liebherr’s production facility in Xuzhou.

　　Ladies and gentlemen,

　　before I finish, let me shortly look back to our project in the aftermath of the 2008 earthquake in Sichuan Province, which I mentioned two years ago at our Bauma China 2008 press conference.

　　We have been engaged in the reconstruction of an old people’s home near the City of Gu Cheng in Sichuan’s Pingwu County. The project was financed by Liebherr and implemented together with the two charity organisations Malteser International and Caritas International. In Liujiaba, a village 5 km off the City of Gu Cheng, a new home for the aged has been erected on a total area of about 4,200 m². We are proud to report that the facility has been handed over in November 2010 offering living space for needy elderly people from that area.

　　Please let me now hand over to my colleague Christoph Kleiner for his comments on our mobile crane activities here in China.

　　Thank you for your kind attention!