A unit of the shipbuilding conglomerate, China Shipbuilding Industry Corp, on Friday got official approval to launch its baggage handling system on the market.

It is the first such system manufactured by a Chinese company, and puts Kunming Shipbuilding Equipment Co Ltd, or KSEC, in direct competition with foreign rivals such as Siemens AG, whose products have been widely used in Chinese airports.

Incorporating an equal level of quality and technical sophistication, the Chinese equipment can be purchased for just 70 percent of the cost of systems manufactured overseas. Annual service and maintenance charges amount to 0.2 percent of the total cost of the equipment, compared to between 2 percent and 5 percent for foreign products, industry data showed.

"We can lower airports' costs in equipment purchasing, maintenance, servicing, facility upgrades and all other aspects," said Ji Lichen, general manager of KSEC.

Ji said the company has encountered numerous doubts and difficulties because of the aviation industry's high thresholds and the technical gap between domestic and foreign manufacturers.

In 2008, KSEC set up a joint venture with Logan Teleflex Ltd, which has 40 years' experience in the industry. The joint venture provided the know-how, with KSEC in charge of production and manufacturing.

"More than 80 percent of our system and equipment is domestically designed and produced," Ji said.

Industry analysts said this marks an impressive advance in the technical sophistication of domestic manufacturers.

The company intends to tap China's burgeoning market for airport infrastructure.

Industry reports show that 425 billion yuan ($68 billion) will be invested in airport construction in the country in the next five years, including 56 new airports, 16 relocations and 91 expansion projects.

The domestic system has attracted interest from many large airports on the Chinese mainland, including those in Beijing, Guangzhou and Chengdu, the company said.

"Many foreign suppliers have lowered their price because of us," Ji added.

Apart from the domestic market, the company has exported equipment to countries that include the United Kingdom, Russia, India, Singapore and Belgium through its joint venture with Logan. "Instead of merely equipment, very soon we will be able to export the airport baggage handling solution as a whole," Ji said.

Sun Bo, senior executive at the China Shipbuilding Industry Corp, said this project serves as an example of the group's shift of focus from the shipbuilding sector to heavy industry.

"We will use our technical advantages and continue developing non-marine products, expanding into industries such as energy, transportation and logistics, and expanding our presence globally," he said.

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