MAJOR domestic construction machinery maker Zoomlion Heavy Industry Science and Technology Co. expects to see a sharp rebound in earnings this year, following three years of profit declines.

    “Our 2015 net income will increase significantly from last year’s level,” chairman and CEO Zhan Chunxin said. Zhan attributed the recovery to Zoomlion’s bid to diversify into other lines of equipment and deep cost-cutting. He declined to provide specific numbers due to disclosing rules.

    Zoomlion, which made its name selling hammerhead tower cranes and truck-mounted pumps during China’s building boom, has struggled alongside its peers from the supply glut created by China’s US$640 billion stimulus package launched in 2008.

    For Zoomlion, which warned just two months ago that its 2014 earnings would slump as much as 80 percent, a return to a healthier bottom line would be validation of its five-year effort to expand the scope of its operations.

    “All our efforts will pay off this year,” said Zhan.

    Zoomlion has added high-performance street sweepers, sewage disposal vehicles among others to its portfolio, while taking control of Chery Heavy Industry Co., a major domestic farm machinery maker.

    Those two business divisions, Zhan estimated, could contribute more than one-third of Zoomlion’s revenue and nearly 50 percent of its profit this year, he said. Ruthless cost-cutting, or what Zhan refers to as “towel wringing,” also helped.

    Zoomlion has slashed its work force by nearly one-third, which saved at least 500 million yuan (US$80.70 million). Procurement costs were also cut between 5 and 10 percent, saving 300-500 million yuan a year.

    Other construction equipment makers are also reducing capacity and slashing costs. Shantui Construction Machinery Co. walked away from a deal to take control of a subsidiary of U.S. construction machinery firm Manitowoc Co. (SD-Agencies)