South Korean machinery company Doosan will strengthen its research and development (R&D) facilities in a bid to consolidate its foothold in China's machine tool market.

　　The trans-national machine manufacturer and service provider has set up a factory, costing US$20 millio n, in Yantai in East China's Shandong Province. It has an annual production capacity at 1,000 units.

　　Meanwhile, an R&D centre was established to develop machine tools for Chinese companies.

　　At the moment Doosan supplies 40 per cent of China's auto parts producing sector. It also makes machines for other sectors, such as the construction industry.

　　According to Kim Woon-bum, vice-president of Doosan Infracore Co Ltd, all machines produced in China are developed by the local R&D centre.

　　The company aims to sell 1,400 machines in China this year, 400 of which will be manufactured at the Yantai factory. The rest will be produced in South Korea.

　　Sources from the China Machine Tool and Tool Builders' Association (CMTBA) revealed demand for global auto parts and accessories is estimated to reach US$50 billion globally this year and next, 70 per cent of which will come from China.

　　This will boost the demand for machines that make auto parts and accessories.

　　"Our products are high quality, reliable, accurate and reasonably priced," said Kim, adding that the Yantai factory would reduce costs and localize products.

　　The general manager said investment in buildings and people had put Doosan at an advantage in the machinery production market in China and internationally.

　　Doosan puts 3.5 per cent of its sales volume into R&D.

　　In South Korea, Doosan Infracore, which has a total of 960 employees, has 250 people engaged in R&D. The company will keep that ratio in its China business.

　　The development period for a new model has been shortened to one year, compared with two to three years several years ago. This latter figure is still the industrial average.

　　Last month the company took part in SIMTOS2006 - a biennial international machine tools exhibition - in Seoul.

　　It showed off 30 digital-controlled machines, 14 of which were new models. One of those was designed for the China market.

　　"We will further invest US$10 million in the coming two to four years to enhance R&D and expand our Yantai plant's annual production capacity to 2,000 units by 2010," said Kim.

　　China's market for machines that can make auto parts is currently dominated by US and European companies.

　　Kim believes Doosan's R&D strength and its advanced manufacturing facilities will allow it to become a global player.

　　Kim said the majority of China's machinery producers still lacked international competitiveness in terms of technology and design.

　　"But they are growing very quickly," said Kim, who predicted Chinese firms would catch up with Doosan within five to 10 years.

　　According to Wu Bailin, secretary-general of the CMTBA, China's machine tool industry was on a fast development track brought about by ever-increasing competition at home and abroad.

　　Foreign companies were helping to promote the overall growth of the industry in China, he said. ()