It isn’t often that a company with more than six decades of operation in the heavy equipment industry can be said to make a debut.
That is just what one of the largest manufacturers in China is doing, however – and it’s doing so in Alberta.
Founded in 1951, XGMA has evolved over time to have three manufacturing facilities that produce 40,000 loaders and 20,000 excavators annually, along with forklifts, pavers and other types of equipment. Along with supplying the Chinese domestic market, the company has focused on large export markets that include Russia, Brazil, Australia, the Netherlands and numerous other countries in Asia, Europe and Africa.
With successful export channels throughout the rest of the world, it only made sense for XGMA to start exploring its options in North America, said Tulio Conejeros, XGMA vice president of North American Operations.
“They did about two years of research in 2014 and 2015, and had a report done on the North American market; they also sent some of their research and development personnel to Canada to learn about the standards and the environment the machines would be working in,” he said. “They also wanted to learn about what the operators are used to and what they’re comfortable with. It was a lot of consideration of what the market was like, both from the viewpoint of the end user and the market itself.”
As part of that research, the XGMA personnel visited oil sands operations in northern Alberta to view the challenging conditions that equipment faced in that environment first-hand. During those visits, questions about potential service contractors pointed towards Leduc, AB-based Gladiator Equipment. A company with 13 years of experience working in the Edmonton area, Gladiator was mentioned as potentially able to provide service to any XGMA machines in the area, explained Steve McNeil, president and CEO.
“Over a series of many conversations and a trip to China to visit the plant, that developed into us becoming the first North American dealer,” McNeil said. “Gladiator Equipment already has contracts up in Fort McMurray, so our name came up as a potential provider – it was kind of a ‘right place and right time’ scenario.”
McNeil and Gladiator have worked with many large contractors and are very familiar with industries including heavy construction, mining and pipeline operation – as well as the quality of the equipment needed in those industries. He said the opportunity to see XGMA’s factories and speak to the R&D team as well as executives helped affirm that partnering with the company would be a good fit for Gladiator.
“They were extremely professional, motivated and everyone was excited about potentially entering the North American market,” he said. “When I saw that and the support we would have, those were all big factors for me. During the process I realized the potential in North America, and that really drove me towards a willingness to become a dealer.”
North American focus
With input from the Gladiator team, XGMA focused on bringing their first North American offerings to regional standards, Conejeros said. Based off existing designs, the equipment – an excavator and wheel loader will be the first to cross the Pacific – needed to be modified to fit the needs of the new location.
“They brought the excavator up to the North American standards; during that process we got help from Gladiator to make sure we were doing all the right things, ensuring we had all the features that operators would want to see,” he explained.
The result of that process is the first XGMA machine to be made available in North America: the XG822FL. A 22-ton machine, the excavator’s design is very much a team effort, McNeil said.
“What I’m excited about is the fact we built it together – it was manufactured in China, but they took a lot of the comments and suggestions that we had and applied them towards this machine. It’s a machine that can compete from day one,” McNeil said.
“Things like auxiliary hydraulics being standard – in a lot of cases that’s not standard equipment. Two buckets are standard – a digging bucket and a cleanup bucket – and we have things like certified rollover protection as standard equipment, things like additional guarding over the windows. Quite often we’d call that bush guarding. That’s all standard.”
The XG822FL has bucket capacity of 1.3 cubic yards standard, and a breakout force of 180 kN that rivals other machines in the class, according to XGMA. It is powered by an Isuzu Tier 3 engine generating 187 hp (140 kW) at 2000 rpm.
“Isuzu is well accepted in Canada, and there’s an Isuzu dealer network spread throughout the country. We researched it with potential end users and asked how they felt about Isuzu engines, and I have to say the feedback was excellent,” McNeil said.
The decision to offer a Tier 3 machine in Canada to start was based on customer considerations, Conejeros said, noting that the majority of customers are still looking for the lower cost and complexity levels of Tier 3. Offering the Tier 3 engines will give XGMA an opportunity to perfect the machines with a good understanding of what customers are looking for prior to introducing Tier 4 engines in 2018, he said.
While the excavator is currently available, the second offering from XGMA to the Canadian market will be arriving in the near future – a wheel loader that was also developed based on input from Gladiator’s team.
McNeil said the loader will be in a size range that makes it popular for such operations as construction, roadbuilding and pipeline work. Versatility will be a big part of the loader’s offerings, as it comes standard with a quick disconnect system that can switch between digging buckets, cleanup buckets or heavy-duty forks.
“We’ve seen forks and bucket on other competitive machines, but this one will have a heavy-duty set,” McNeil said.
Other features of the wheel loader will include internal wet disc brakes and axles manufactured by ZF using the very latest in technology, McNeil said.
The machine will be powered by a Cummins Tier 3 engine. The cab is designed to be ergonomic, with very simple joystick-style controls for all the necessary operations.
Servicing is always a concern for imported equipment, but McNeil said Gladiator is fully prepared to handle service and parts support for the XGMA products thanks to the strict focus on the two types of machine at the outset.
“We will be able to bring in parts and components to support those two specific pieces of equipment – we’re not going to start off with 15 types of machines,” he said. “We’ll start off with those two and expand from there as time goes on.”
Gladiator has a strong reputation in western Canada for its service quality, McNeil said.
“If they have a breakdown or they require service at our shop or in the field, customers want to know they’ll be looked after,” he said. “We built our company on service. We’ve got contracts with some prominent and well-respected companies in western Canada that we provide service to – we feel we have a proven track record and excellent reputation.”
The launch of XGMA into Canada has already drawn significant interest from some large potential buyers in the Alberta region. Several large oil companies in the Fort McMurray area have expressed interest already, thanks to the potential cost savings of the XGMA machines over other manufacturers.
“They want to know that they can buy a piece of equipment that will do the job at a cost savings,” McNeil explained. “They want to ask ‘If we compare this other well-known OEM to XGMA, can we save money buying this equipment?’ The answer to that, in my opinion, is yes… you can save a significant amount of money on the actual purchase price, which then translates to parts and components. So, for example, we can safely use a number of approximately 20 percent on the capital cost for a comparably equipped piece of equipment, and that number translates on down the line to parts and components.”
Once XGMA has established the equipment and support services in Alberta, plans are to expand into other areas, Conejeros said. A dealer is expected to be added in British Columbia, and the company will look east later in the process. The United States is also on the radar, but that may take more time – which, to XGMA, is just fine, he noted.
“One of the things that impressed me the most about XGMA is they understand a lot about the market. It’s not about coming in here and making a big splash,” Conejeros said. “We’re not big on huge operating costs and big offices. We much prefer to pass those cost savings onto our customers, thus creating added value to the end user.”
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