CHINA’S slowing economy has taken its toll on the first-half earnings of major construction machinery makers Zoomlion Heavy Industry Science and Technology Co. and Sany Heavy Industry Co.

    Encouraged to expand after the government unleashed a US$644 billion stimulus package in 2008 during the global financial crisis, Chinese heavy equipment makers are stuck with a glut of unsold equipment and factories they do not need.

    In the January-June period, Zoomlion booked a 309.8 million yuan (US$48.51 million) net loss, in line with its own forecast of 300-380 million yuan, according to a stock exchange filing yesterday. It made 900.1 million yuan net profit a year earlier.

    Sany reported a 75.6 percent fall in net income to 334.8 million yuan for the same period, according to a filing.

    Even China’s pledge to support the “Silk Road” infrastructure initiative with US$40 billion worth of investments may not be enough to revive the heavy machinery sector, industry players and analysts said.

    Projects under the “Silk Road” plan include a network of railways, highways, oil and gas pipelines and power grids across central, western and southern Asia to as far as Greece, Russia and Oman.

    “There are too many machines out there in the market,” Zoomlion chairman Zhan Chunxin said recently.

    “Companies tended to get orders ahead of major infrastructure projects previously, but now we hardly get any inquires even if several projects kick off at the same time.”

    (SD-Agencies)