Tech Giants: Starting from Bankrupt Companies

65: Chapter 65: Product Expansion, Building Up Strength for Future SuccessAfter lunch, Zhao Tiezhu took Su Chen to the R&D testing center.

In a corner of the center’s lobby, three machine tools were covered with dark blue dust cloths, like sculptures waiting to be unveiled.

”General Manager Su, these are the three new products we started developing last year.” There was pride in Zhao Tiezhu’s voice. ”Although they aren’t as dazzling as the five-axis machine tools, they are the flagship products that will allow Xingchen Heavy Industry to truly generate volume and establish a firm foothold in the market.”

He walked to the first machine tool and pulled away the dust cloth with a firm tug.

A dark gray, simply designed CNC lathe was revealed. It was more compact than traditional lathes, with a fully enclosed protective cover and a transparent observation window on the side. On the front of the machine, a touchscreen control panel glowed in standby mode.

”The Xingchen Jingwei series CNC lathe.” Zhao Tiezhu introduced, ”It has a maximum machining diameter of 800mm, a maximum spindle speed of 5000 RPM, and a spindle radial runout of ≤ 0.001 mm. It is equipped with our self-developed ’Xingkong’ CNC system and supports turning-milling composite functions—simply put, it can not only turn outer circles and bore inner holes, but also perform simple milling operations.”

He asked the technicians to turn it on for a demonstration. The spindle rotated slowly, with almost no sound. On the workbench, a blank piece of an automotive engine crankshaft was clamped in place. The robotic arm automatically changed the tool, and the tip touched the workpiece lightly; not even many sparks flew.

”The noise is lower than 70 decibels, which is 15 decibels lower than similar foreign products.” Zhao Tiezhu said, ”We improved the preload structure and lubrication system of the spindle bearings. More importantly, the CNC system is 100% self-developed, so we don’t need to pay Siemens a system licensing fee of over 100,000 yuan per unit anymore.”

Su Chen leaned over to observe the cutting process. The tool tip grazed the metal surface, and the chips were beautiful, long silver coils that spiraled down like springs. ”This chip morphology indicates that the cutting parameters are very reasonable.”

”General Manager Su is an expert.” Zhao Tiezhu was somewhat surprised. ”Yes, we spent three months optimizing the cutting database. For different materials and different tools, we preset the optimal speed, feed, and cutting depth parameters. Users only need to select the material and the tool, and the system automatically provides the recommended parameters, allowing even a novice to do the work of an Old Master Craftsman.”

He continued to explain the market positioning: ”This model targets markets like automotive engine crankshafts, aerospace rotating parts, and hydraulic cylinder barrels. We have already received an order for 30 units from Sany Heavy Industry for excavator slewing bearing processing. The price per unit is 980,000 yuan, which is 40% cheaper than similar products from Germany.”

Su Chen asked: ”What is the delivery time?”

”45 days, from receiving the order to shipment.” Zhao Tiezhu replied, ”Because we don’t need to wait for such long casting aging—lathes have lower requirements for bed rigidity than five-axis machine tools, so we can combine vibration aging with artificial aging to compress the casting processing time to 20 days. Then, assembly and debugging take 25 days.”

”Good.” Su Chen said only one word.

The second machine tool was unveiled. This was a larger machine with a workbench area of a full 2 meters by 4 meters, featuring a gantry structure with a wide and thick crossbeam.

”The Xingchen Luban series CNC milling machine.” Zhao Tiezhu patted the sturdy crossbeam. ”Designed specifically for large molds. Automotive covering molds, home appliance shell molds, and especially wind turbine blade molds—now, the longest wind turbine blades have reached 80 meters, and their molds are over 85 meters long, requiring multiple such large milling machines to be spliced together for processing.”

He showcased the automatic tool changer, where sixty tools were neatly arranged: ”The rapid traverse speed for the three axes is 60 meters/minute, with a positioning accuracy of 0.005 mm. We improved the acceleration curve of the guide rails to make the machine tool more stable during high-speed movement, avoiding vibrations that affect surface finish.”

”Are there any orders?” Su Chen asked.

”Dongfang Electric has ordered five units for wind power mold processing. The Gree mold division is also in talks, likely for eight units.” Zhao Tiezhu pulled up the client list. ”The price per unit is 2.2 million yuan. This market was previously monopolized by Germany’s DMG Mori and Japan’s Mazak. Our price is only half of theirs, but the performance reaches over 85%.”

The third machine tool looked the most cumbersome, with columns as thick as bridge piers.

”The Xingchen Gongshu series CNC drilling and boring machine.” Zhao Tiezhu opened the protective cover, revealing the huge spindle. ”The spindle torque is 1200N·m, capable of drilling deep holes with a diameter of 100mm, and the boring accuracy reaches IT6 level. It is equipped with a laser tool setter and an online measurement system, monitoring tool wear and aperture changes in real-time during the machining process.”

He emphasized the application areas: ”Marine diesel engine blocks, nuclear power pressure vessels, chemical reactors—these are all ’heavy equipment of a great nation.’ Previously, we either imported the entire machine or sent them abroad for processing. Our unit has already passed the tests by China State Shipbuilding Corporation and received an order for two units for the processing of main engine blocks for ten-thousand-ton cargo ships. The price per unit is 3.8 million yuan.”

After introducing the three machine tools, Zhao Tiezhu summarized: ”These three products are positioned in the mid-to-high end. The technical difficulty is one level lower than five-axis machine tools, but the market capacity is at least ten times that of five-axis machine tools. If we can achieve a monthly production capacity of 50 units each, that’s 1,800 units a year, with revenue exceeding 3 billion yuan. More importantly—”

He paused. ”These machine tools will enter thousands of manufacturing enterprises, becoming the entry point for our CNC system, the touchpoint for our after-sales service, and the stepping stone for technological upgrades. Once users get used to our lathes and milling machines, the first thing they will think of when they want to buy five-axis machine tools in the future will be Xingchen Heavy Industry.”

That afternoon in the R&D center conference room, a video feed of Lu Qiming appeared on the large screen.

This Chief Scientist of Xingchen Heavy Industry was attending a machine tool exhibition in Hanover, Germany, with the bustling exhibition hall in the background.

”General Manager Su, Tiezhu, you’ve seen the new products, right?” Lu Qiming’s voice came through the network, slightly distorted but very clear. ”I know some people might think that we are putting aside the high-difficulty five-axis machine tools instead of focusing all our efforts on breaking through, and that we are doing these ’ordinary’ machine tools instead—is this putting the cart before the horse?”

He switched the PPT, displaying a chart of the global machine tool market landscape: ”But please look at the data. The global machine tool market is worth about 80 billion USD, of which high-end five-axis and above machine tools only account for 8%, about 6.4 billion USD. However, mid-to-high-end three-axis and four-axis machine tools account for 45%, exceeding 36 billion USD.”

The chart zoomed in, highlighting the China market: ”Look at China again. We spend over 10 billion USD importing machine tools every year. Among them, five-axis machine tools account for about 800 million USD, while the remaining 9.2 billion USD is spent on mid-to-high-end three-axis and four-axis machine tools. Why? Because our car factories, mold factories, and general machinery factories need reliable, efficient, and cost-effective production equipment, not cutting-edge equipment that costs tens of millions per unit.”

Lu Qiming adjusted his glasses, his expression serious: ”So my strategy is clear: use five-axis machine tools to set a technical benchmark and prove that we have the ability to be world-class; use the Jingwei, Luban, and Gongshu series to seize the mid-to-high-end market and achieve economies of scale. Walking on two legs—both are indispensable.”

He reported the technological breakthroughs in detail:

”First, the CNC system is 100% self-developed. The ’Xingkong’ system has already iterated to version 3.0, supporting advanced functions such as five-axis linkage, turning-milling composite, and adaptive cutting. The code autonomy rate is 100%, no longer being constrained by others.”

”Second, the autonomy rate of key functional components has reached 80%. We jointly developed the spindle with Luoyang Bearing Group, reaching P4 level (international precision level) accuracy; we cooperated with Huazhong CNC on ball screws, reaching C3 level accuracy; we tackled the linear guide rails together with Nanjing Craftsman Equipment Factory, and they are already in small-batch trial use.”

”Third, the process database has been preliminarily built. For 45 common materials and 200 types of tools, we have established a dataset containing 12,000 optimal cutting parameters. User machining efficiency has increased by an average of 15%, and tool life has been extended by 20%.”

Lu Qiming concluded: ”General Manager Su, I know the group has ample cash flow now, and Spark Power is shining brightly. But please believe that machine tools are the true mother of industry. For every Xingchen machine tool we sell, China imports one less foreign machine tool; for every factory that uses our system, the digitalization and intelligence of China’s manufacturing in the future will have more autonomous and controllable confidence. This road is slow, but every step is taken on the solid ground.”

The video conference ended, and the conference room fell silent.

Everyone looked at Su Chen. Zhao Tiezhu was a bit nervous, his fingers tapping the table unconsciously. Lin Wan was quickly recording key points in her notebook. Several technical leads held their breath.

Su Chen was silent for a full three minutes.

Then he raised his head, his gaze sweeping across everyone: ”Three directions.”

”First, expand production capacity.” He looked at Zhao Tiezhu, ”Start the planning for the third-phase industrial park immediately. The focus this time is not to build more factory buildings, but to solve bottlenecks. Invest 500 million yuan to build a rapid aging workshop for large castings. Dr. Li—”

Material engineer Dr. Li sat up straight immediately.

”You lead the formation of a special team to investigate the world’s most advanced stress relief technologies. Ultrasonic aging, thermal aging, vibration aging, even cold treatment aging—study them all. The goal: compress the processing time of high-precision castings from 3-6 months to within 3 months. There is no budget cap; if you need equipment or talent, write a report directly.”

Dr. Li nodded excitedly: ”Yes! General Manager Su!”

”Second, improve efficiency.” Su Chen turned to Production Director Master Wang, ”Master Wang, you are the most experienced. I would like you to take charge of establishing a ’Process Breakthrough Group’ to find room for optimization in every link of the assembly process. Is it possible to compress the 45-day assembly and debugging cycle to 30 days? Don’t be afraid to change traditional methods; we can introduce digital assembly guidance systems, augmented reality assisted debugging tools, or even develop specialized assembly robots. The goal: increase efficiency by 30% without reducing quality.”

Master Wang pondered for a moment, then slapped the table heavily: ”Okay! I, old Wang, have been working with machine tools for forty years, it’s time to use some new gadgets. 30 days... I’ll try!”

”Third, expand the market.” Su Chen said finally, ”For the Jingwei, Luban, and Gongshu series, General Manager Zhao, you must set a military order: in the remaining six months of this year, sell at least 200 units of each series, with an annual goal of 500 units each. Don’t just focus on big clients; small and medium-sized manufacturing enterprises are the base. We can launch financing and leasing schemes, trade-in policies, or even shared machine tool models—letting companies that can’t afford the whole machine use our equipment.”

He stood up, walked to the window, and looked at the busy scene in the park: ”I know the machine tool industry is difficult, with high investment, slow returns, and fierce competition. But precisely because it is difficult, it is worth doing. Spark Power has let the world see China’s breakthroughs in the field of new energy; now, it is Xingchen Heavy Industry’s turn to let the world see China’s resilience in the field of high-end manufacturing.”

Su Chen turned around, his eyes blazing: ”General Manager Zhao, you previously said you wanted to become number one in revenue in China’s machine tool industry within three years. Today, I’ll add one more condition: within five years, Xingchen Heavy Industry must enter the top ten global machine tool companies. Not by low prices, but by technology, quality, and service.”

Zhao Tiezhu stood up abruptly, the eyes of this tough Northeastern man slightly red: ”General Manager Su, since you’ve put it this way, if I, Zhao Tiezhu, fail to complete the task, I will resign myself!”

”I don’t want you to resign.” Su Chen walked over and held his hand, ”I want you to lead Xingchen Heavy Industry to become the backbone of Chinese manufacturing. Let all future Chinese engineers, when they want to use top-tier machine tools, think not of Germany, not of Japan, but of our own brand.”

The meeting ended, and everyone dispersed to prepare.

Su Chen and Lin Wan walked out of the R&D center last. The sunset was setting, and the shadows of the park were drawn out long.

”Do you really want to invest so much money in machine tools?” Lin Wan asked softly, ”The third-phase industrial park, the rapid aging workshop, the process breakthrough... that’s another several billion in investment. And the payback period could be five or ten years.”

Su Chen did not answer immediately. He looked at the castings lying quietly in the No. 1 factory building in the distance; they were still waiting in the long aging process.

”Lin Wan, do you know why Germany and Japan were able to become manufacturing powerhouses?” He said slowly, ”It’s not because they have Mercedes-Benz or Toyota, but because they have Trumpf, DMG Mori, Mazak, Fanuc... These machine tool companies are the roots of their industrial systems. We always wanted to pick the fruit before, but forgot to plant the tree. Now, it’s time to plant the tree.”

He stepped forward, his pace firm.

”And I believe that when our tree grows into a forest, the fruit it bears will be sweeter than what others pick.”

In the park, the bell for the night shift workers rang.

New work was about to begin.