Shanxi Haiyang Hydraulic Co., Ltd.: Industrialization of High-End Hydraulic Equipment
The high-end hydraulic complete equipment industrialization project of Shanxi Haiyang Hydraulic Co., Ltd. is one of the key projects in Yuci District in 2014. Its main construction content is a production line for rodless coalbed methane and shale gas extractors, with an annual production capacity of 10,000 sets of high-pressure plunger pumps, valves, and hydraulic motors. Currently, this equipment has passed industrial performance assessments and technical principle inspections and is undergoing tests focused on commercialization, stability, and durability.
On July 7, the author visited Shanxi Haiyang Hydraulic Co., Ltd. to observe the project’s progress and to learn more about the story of the company’s pursuit of excellence and innovation.
Competing with the “Monopolists”
In the eyes of Liu Xiaomin, Chairman of Haiyang Hydraulic, the rodless extractor represents both the company’s long-term goal and its future direction.
Talking “rod.”
Most people’s first impression of oil or gas fields is of the nodding donkey pumps—machines continuously moving up and down, resembling devout worshipers bowing in prayer. These are beam-pumping units, or traditional rod pumping machines. Each unit consists of multiple components such as a motor, reducer, crank, connecting rod, and walking beam. Deep underground—at depths exceeding 1,000 meters—a subsurface pump extracts oil or gas through the reciprocating motion of a plunger connected to a long rod. The rod’s length must match the depth of the well, often weighing five to six tons, leading to high energy consumption. Furthermore, beam pumps require vertical extraction, limiting their adaptability to complex terrains.
Since the appearance of the beam-pumping unit more than 120 years ago, its basic working principle has remained largely unchanged, maintaining dominance over 90% of the global market.
Liu Xiaomin and Haiyang Hydraulic, however, aim to challenge this monopoly by developing a production line for rodless coalbed methane and shale gas extractors, eliminating the need for rods and vertical extraction.
Starting a Business After Fifty
With integrated capabilities in R&D, design, manufacturing, and import-export, Haiyang Hydraulic possesses the technical strength to challenge world leaders in this field. As Liu puts it plainly:
“We can build this machine.”
Haiyang Hydraulic started from humble beginnings a decade ago. Its predecessor was a tiny 10-square-meter workshop with only a desk and a few chairs.
“After ten years of entrepreneurship,” Liu said, “I realized one thing: entrepreneurship is about mindset and passion—it’s never too early or too late. What matters is persistence.”
In 2002, due to institutional and economic difficulties, Yuci Hydraulic Plant-year-old Liu and his wife took early retirement, with a combined monthly income barely exceeding 1,000 yuan—while still supporting their son’s education. After much consideration, Liu decided to start his own business. Together, they rented a small storefront, selling and repairing hydraulic components. Despite its small size, their commitment to quality and integrity quickly built a loyal customer base.
In 2005, Liu boldly accepted a contract to design and produce China’s first multi-roll thin plate cold rolling mill. With guidance from experts at Taiyuan Iron & Steel Co., and months of effort, Liu succeeded—filling a domestic technology gap and proving his engineering capability. The breakthrough generated widespread attention in the industry, leading to a surge in orders and marking the company’s first major financial success.
Innovation Fuels the Company’s Rise
With the company now on track, Liu achieved another milestone by obtaining a national patent for the “Radial Clearance Elimination Intelligent Control System.”
Previously, multi-roll cold rolling mills had to be imported, as the overall frame structure was patented abroad. Domestic manufacturers were forced to use split roller box designs, which often caused plate shape defects due to minute structural deviations. Liu’s patented system solved this critical problem, breaking through the long-standing bottleneck in China’s cold-rolled plate control technology.
Guided by a philosophy of technical focus, market insight, and innovation, Liu went on to develop two more flagship products: large hydraulic cylinders and metallurgical furnace extraction machines, both of which hold independent intellectual property rights and are exported to countries such as France and South Africa.
As Liu puts it,
Without innovation, there can be no development.
To date, Haiyang Hydraulic holds 12 national patents. In 2010, it was recognized as a National High-Tech Enterprise, solidifying its position as a regional leader in the hydraulic industry.
Seizing the High-End Market
“Losing the high end while crowding the low end” has become a common dilemma in the hydraulic industry. Liu Xiaomin believes that low-end price wars are unsustainable; instead, technological advancement and high-end products represent both the bottleneck and the opportunity for growth. This insight led him to focus on rodless coalbed methane and shale gas extractors.
He had envisioned the project years earlier, but technical barriers had delayed its realization. With advances in modern technology, that vision finally became feasible.
In typical hydraulic systems, oil is used as the working fluid. However, in gas extraction applications, water transmission must be used due to technical and safety requirements. This seemingly simple substitution posed the greatest challenge: water’s physical properties made it difficult to achieve effective sealing and durability. After numerous failed experiments, Liu’s team finally discovered a special alloy material capable of withstanding the demanding conditions, thus solving the key technical problem.
The prototype has since passed industrial and technical principle tests in real-world coalbed methane extraction trials. Currently, Haiyang Hydraulic is making commercial modifications to the design, with stability testing scheduled for later this month. Experts from the University of Michigan, who have close collaborations with Haiyang Hydraulic, remarked:
If the rodless extractor achieves commercialization, it will mark a revolutionary breakthrough in gas extraction technology. In North America alone, the market potential is enormous.