And Lee: Domestic PLC Breaking Ice Road for Ten Years

Among the many domestic PLC brands, the industry has consistently placed the greatest hope on the time of day, geographical location, and people’s interest. Dr. Xu Changrong and his team, who shouldered the responsibility of the PLC business at one shoulder, also lived up to expectations. They used ten years of “determination” and “belief” to persevere. Solve the PLC localization puzzle. From small PLC applications to flowering, to the successful development of large-scale PLCs to open domestic brands, and then to large-scale PLC breakthrough in 300 applications within just two years, and advantages of PLC over the past decade, today has become very clear.

A hundred years of deep farming

Nowadays, the leaders of the Chinese PLC market are international brands that have accumulated over 30 to 40 years. These brands are almost synonymous with PLC in the eyes of users, and are known in terms of brand awareness, product line richness, application performance, and market experience. There is a big gap between domestic brands. The lack of continuous investment in R&D, production, marketing, and service required for scale management has become a weakness in the industrialization of PLC. However, for a business with such a low return on investment, the high time cost is not affordable for domestic companies. In the case of such a difficult situation, Heli had to pay ten years of hard work and repayment.

The localization of PLC has a long-term strategic significance in the field of automation control to get rid of foreign monopoly. Although the share of PLC in any device is relatively small, it is the key component of any equipment. Moreover, the capacity of China's PLC market is large enough, and the scale of 5 to 6 billion is enough to support several large-scale domestic manufacturers. In terms of user demand, domestic PLCs are closer to domestic companies in terms of price and service. At the same time, the development of large-scale PLC is one of the national “major equipment localization” plans. Heli who has a strong national sentiment has successfully created the myth of domestically produced DCS. Naturally, it is unwilling to allow foreign products to dominate the world in the PLC field.

In terms of technology, Hollysys has accumulated 70%-80% of the technology required for the development of PLCs when doing DCS. However, PLC is different from DCS in terms of CPU platform technology, high-speed communication, etc., but it has a lot of signal processing and software. The same is true. In addition to the technology itself, Hollysys has a relatively mature experience in R&D. There are many lessons to be learned from the large-scale production and industrialization of products. As the leading automation company in China, after more than ten years of development, Hollysys has continuously attacked the city in the DCS, railway, and nuclear power markets in recent years, pushing the application of products to the high end, and the annual business volume reaches several billion. The abundant funds greatly satisfy the continuous high investment required for PLC industrialization. Xu Changrong once more reflected on why domestic PLCs are struggling so hard: "I think actual investment is the biggest factor. When you come up, you want to have a big return. It's definitely unsustainable."

In 2000, when Hollysys DCS reached the scale of 200-300 million in China, it decided to develop its own PLC from the core position of the control system. In that year, Hollysys had introduced foreign PLCs to its own projects, groping for technology, accumulating experience, and understanding the needs of the industry, competitors, and customers. Xu Changrong himself also transferred from the DCS business to the PLC business in 2003. In 2004, Hollysys launched an LM compact PLC with independent intellectual property rights. In 2006, Hollysys launched the first domestic LK series large-scale PLC with independent intellectual property rights. In 2007, the PLC business got a rapid development. From 2007 to 2009, LM Compact PLC and LK Large PLC products achieved a 100% year-on-year growth rate. Today, small PLCs have been successfully applied to thousands of users in industries such as machinery, power monitoring, electrical switches, central air conditioning, medical, electronics, instrumentation, and gas preparation; large-scale PLCs are used in power, metallurgy, municipal, water conservancy, chemical, and other industries. More than 300 sets. Especially in the municipal industry, based on the early years of engineering accumulation, Hollysys PLC has more than 100 projects in water treatment. It was precisely because of the "points" of breakthroughs in many industries, and Lee Shih began to plan for the next step to connect these points into a line, and eventually reached a level with foreign manufacturers.

In view of the fact that PLC's operation has a completely different model from that of DCS's engineering, Lees has also gradually increased its marketing efforts. Training and seminars have gradually begun in the country. At the same time, the brand awareness and influence of Hollysys PLC have been continuously improved. The performance indicators of Hollysys PLC, especially the processing speed and communication function, have been recognized by customers and even industry peers. The current PLC business has achieved a certain scale, has accumulated more than 1,000 customers, the annual turnover reached tens of millions, and the number of product applications has reached tens of thousands. Xu Changrong’s goal is to reach the scale of 100 million as soon as possible. “I believe that within two to three years, we can achieve it. During the financial crisis in 2009, we still maintained rapid growth, and even grabbed some big customers from foreign manufacturers.”

Strive to avoid weaknesses

PLC as a standard product, stability, reliability is very important. He Lishi, Chairman of the Board of Directors, Wang Changli repeatedly stressed that "the product must be reliable." The PLC business is indeed down to earth and in no hurry.

After the introduction of the small-scale PLC in 2004, Hollysys was mainly looking for several key customers to do. After one year's product stability and reliability were tested and continuously improved, the sales team was established and the development of high-end products was started. In the end of 2006, Hollysys launched a large-scale PLC with independent intellectual property rights, which was a result of repeated investigations of the performance characteristics and application programs of foreign mainstream PLC products. At the same time, it learned from the company’s technical accumulation in the development of DCS systems and continuously improved the products through its own implementation of engineering projects. Stability and reliability. Before DCS products are sent to the application site, they need to be tested in the company for 1-3 months. The PLC is a standardized product. Once sold, it will be used directly on the customer's site. The productization requirements are higher and must not be lost. Therefore, when Hollysys launched a large-scale PLC, it first did a dozen model projects, and in 2008 it gradually established a large PLC sales team to promote it.

In the fierce market competition, Helishi gradually found its own position and advantage areas. In terms of market positioning, Hollysys PLC is positioned in the mid-to-high end, targeting users with certain performance, price and service requirements, and focusing on advantageous resources in local and local industries. In the industry, Hollysys PLC quickly established water conservancy and hydropower and other advantageous industries. Water conservancy and hydropower requires fast processing and many control points. After entering this industry, Hollysys quickly improved its products and successfully copied many other water conservancy and hydropower projects through communication with customers. Responsiveness to the market is a big advantage that distinguishes foreign companies from foreign companies.

It is worth mentioning that, even though the large-scale PLC of Heli had only been officially promoted for only two years, it was more aggressive than the small-sized PLC. The customers of small-scale PLCs are generally mechanical manufacturing industries, and they have limited understanding of profit-making. However, in the large-scale PLC application project companies, the popularity of Lee Hwa is not to be forgotten. All the way to explore, of course, also avoid detours. Seeing the good start of small and large PLCs, Hollysys introduced a motion-controlled PLC last year, but the market reaction was not as fast as expected. Xu Changrong once again realized that it is necessary to consolidate the two core products first, and to take advantage of the industry to make breakthroughs in local areas.

At present, the mainstream PLC suppliers in the world are often HMI hardware and configuration software product suppliers, especially large and medium-sized PLCs. Helishi also naturally has plans for related ancillary products, particularly in the factory automation market, but it is more inclined to provide OEMs, partners, and other models, and is not in a hurry to stretch the front. At present, the PLC of Lee Hsien is promoted by the industry and there are already several stable industries. In the future, one or two industries will be gradually cultivated and cultivated.

Lonely Breakthrough Persistence

At present, in the PLC market, the share of domestic brands is less than 2%, not to mention the formation of industrial clusters and the expansion of the market. Xu Changrong desperately hopes to see the three pillars of PLC made in China and echo with each other in order to share equal shares with foreign companies and allow the PLC market to enter a healthy competition.

Difficulties of domestic PLC, technical and financial obstacles are not insurmountable, and the accumulation of brands and scales is not a day's work, even those eager foreign brands are unbearable long-term investment foreshadowing, who do not count number. And some domestic strength companies also do PLC but do not fight their own brand, and when Lee has been insisting on its own brand. Xu Changrong said: "Helishi is determined to become one of the well-known brands in the field of PLC, not only to occupy an important position in the country, but also to occupy an important position in the international market in the future. For domestic companies, we must first want to be willing to do it. Because this industry is unlikely to have a big profit in one or two years, it will not only require continuous investment in R&D, production, marketing, but also continued confidence to resist the industry's suspicions and pressures. This process is long and arduous, but Once this hurdle is passed, there will be a non-linear and explosive growth.” Xu Changrong believes that PLC's 100% growth in next year and Lee’s time is without doubt.

Some people say that it is necessary to make breakthroughs in the domestic PLC business model. It is the right way to find and develop system integrators with technical strength. Heli currently focuses on direct sales, supplemented by distribution. In response, Xu Changrong believes: “We need to establish the brand and allow users to recognize our products before they can help distributors and integrators to sell together. In the long run, the business model will inevitably shift to partner distribution, but the current focus The industry and key customers have to rely on us to give Lupin the road."

More than ten years ago, the domestic DCS dared to use the software, and it is now possible to make breakthroughs in major projects. Now that domestic PLC has had a spark, it is not known whether it will become a prairie fire after a few years. The success of Hollysys PLC in some industries has attracted some distributors to take the initiative and contact with them. Xu Changrong hopes to become an ally with more partners and find new cooperation points. In May of this year, the 100-person team of the Helisys PLC business will soon move in and take advantage of the 200,000-square-meter new headquarters base in Beijing's Yizhuang to start a new journey in the next decade. Looking into the future, Xu Changrong revealed that the ambitions of Heli PLC were not limited to the domestic market. Since the company's listing in 2008, the chairman Wang Changli has personally focused on international business. Under the strategy of “grouping, productizing, and internationalization” proposed by Wang Changli, the current five processes of process automation, factory automation, nuclear power meter control system, rail transit automation, and informationization have formed. One of the important carriers of internationalization cannot be overlooked.

The word “tolerant to loneliness” is becoming more and more precious in this impetuous era. Ten years of PLC breaking the ice road, and the lone burster of Lee’s time had too much hard work, but he also gained more blessings. In the fiercely competitive automation market, the budding state-owned PLC is weak. Fortunately, unlike the exploration and exploration ten years ago, Helishi has accumulated sufficient practical experience in PLC product R&D, production, and even industrialization. It has a full understanding of the market and channels of PLC products. Development also has a mature and rational understanding and a clearer strategic direction. Of course, domestic PLC and Hollysys PLC still have a long way to go. Xu Changrong, who is low-key, friendly, and low-key, is silently dedicated to the pursuit and ideals of the national core localization project, the company's business New World and personal career achievement. As Dr Xu Changrong said, the success or failure depends more on "determination and belief."