The “blood vessels” of the global cold chain are increasingly circulating “Liaocheng-made intelligent manufacturing.”​ With a failure rate of just one part per million and a price tag only 70% of competing international products, Dofun, a company founded just over a decade ago, has not only breached the import monopoly in the domestic high-end refrigeration market but also sells its own branded valves to Europe, South America, Southeast Asia, and beyond.

From incurring 30 million yuan in losses to securing a key position in the global cold chain, what journey has this company undertaken? Where does the confidence to “wrestle” with internationally renowned brands come from? On May 29, a reporter from Dazhong Network visited Shandong Dofun Refrigeration Technology Co., Ltd. to uncover the “code” behind its remarkable comeback.

Reverse R&D Breaks the Dead End: 30 Million Yuan Loss Paves a Path of Persistent Dedication

Shandong Dofun Refrigeration Technology Co., Ltd., located in the Jiaming Economic Development Zone, Dongchangfu District, is a national high-tech enterprise specializing in the R&D, production, and sales of valves for industrial cold storage refrigeration systems. Its product range includes pneumatic valves and multi-function combination valves. The company is recognized as an SME with Sci-Tech credentials, an SME specializing in niche markets with sophisticated technologies, and a Gazelle Enterprise.

On May 28, Dofun’s production workshop was a scene of bustling activity. Products of various specifications were neatly arranged, presenting an impressive sight. Workers were busy at their respective posts – some processing refrigeration valves, others packing goods into boxes, and some conducting product inspections.

The scene ten years ago stood in stark contrast to today’s professional production lines. At that time, China’s refrigeration valve industry was stuck in the “low-end mire.” Large-scale cold storage projects worth millions uniformly used imported valves. International brands like Danfoss and Parker commanded premiums of 30%-50%, with lead times as long as a year, yet no domestic player could challenge their dominance.

It was this “bottleneck” that secretly strengthened Dofun’s resolve to focus on high-end valve R&D and break the international monopoly. “Committed to promoting the quality advancement process of China’s refrigeration valve industry” – from its inception, Dofun was determined to follow a high-end path. Guided by this philosophy, Dofun embarked on a five-year R&D journey.

Benchmarking against international brands, Dofun conducted reverse engineering, analyzing the materials, structures, and fluid dynamics of international products, then redesigning them to suit China’s complex operating conditions. Finally, in 2017, after five years, Dofun successfully developed a full range of refrigeration products, including globe valves, automatic control valves, defrost valves, and multi-function combination valves. This not only ended the era of “low-end” domestic refrigeration valves but also solved the long-standing pain point of reliance on expensive imports.

The five-year R&D period was a significant test for Dofun. Wang Chao, Deputy General Manager of Shandong Dofun Refrigeration Technology Co., Ltd., explained that over those five years, the company invested over 30 million yuan in R&D alone, alongside extensive market research and promotion. Overall, revenue during those five years was essentially zero, even resulting in losses.

“For entrepreneurs, this process was very painful and difficult to endure. But if you pull through, you find the road ahead gets smoother and smoother,” Wang Chao stated. Sure enough, upon launch, the products received an overwhelmingly positive response. In the first year, the company achieved revenue exceeding 4 million yuan, and it multiplied several times over each subsequent year.

In the product display hall, Wang Chao showed reporters the company’s signature product, also a representative product achieving import substitution.

Shining in Overseas Markets: Winning Customer Trust with Extreme Cost-Effectiveness

In the goods staging area, Wang Chao patiently pointed out shipments destined for Italy, Malaysia, South America, and Africa. Clearly, he has a firm grasp on the destination of every order.

Due to fierce domestic competition and rapid global cold storage industry development, Dofun has consciously shifted its market focus overseas in recent years. This move considers both the huge potential of the international market and the growing international influence of Chinese refrigeration valves.

Consequently, in 2021, Dofun established a foreign trade company, assembled a professional team, and formally began its overseas market layout. The primary question was how to win recognition from international customers.

Participating in exhibitions proved to be the most effective and direct promotional method. In July 2021, Dofun made its debut abroad at an international refrigeration exhibition in Germany, leaving a strong impression on foreign clients. Since then, frequent international appearances have made Dofun increasingly global. So far this year, Dofun has participated in 8 international exhibitions, investing over 3 million yuan.

“Unlike many industries, the refrigeration industry has extremely high requirements for product sealing, so customers are reluctant to try new products easily. Building customer trust is very difficult, but once established, it’s very solid,” Wang Chao noted. He clearly remembers Dofun’s first overseas order from an Italian compressor factory. Initially unfamiliar with Chinese products, the factory eventually agreed to a trial after persistent presentations about the product and company philosophy. The trial showed an efficiency improvement of over 20%, leading naturally to successful cooperation and Dofun’s “first pot of gold” overseas.

What are Dofun’s advantages compared to international brands? Wang Chao admits that international brands like Denmark’s Danfoss have more complete manufacturing systems and broader product ranges. “However, our advantages are also clear: lead time and price,” he adds. Typical lead times for foreign products are long, sometimes up to a year, whereas Dofun’s is only three months. Furthermore, Dofun’s prices for equivalent functionality are about 70% of international competitors, while performance in areas like air tightness and low-temperature reliability is in no way inferior.

Notably, in the second half of last year, an Italian client placed an order for valves for the refrigeration system of an Olympic sliding track. This order has now been fully delivered. Becoming a supplier for the 2026 Milan Olympics is directly attributable to the strong reputation Dofun has built in the international market in recent years.

For Dofun, overseas markets have become a focal point for future strategy. Over the past few years, the company has continuously increased investment in foreign trade, from personnel to funding. It has passed a series of international quality system certifications, strictly upgraded product quality and systems according to relevant national standards and regulations, and obtained EU CE certification.

Since 2021, overseas markets have contributed to about 30% of Dofun’s total revenue, with an annual growth rate of approximately 70%. “Currently, overseas markets are mainly concentrated in Europe, South America, Southeast Asia, and other regions,” Wang Chao said, adding that enhancing international reputation can, to a large extent, positively feedback into the domestic brand effect.

Forging Hard-Core Quality: Redefining New Industry Benchmarks

Wang Chao introduced another representative product: the six-in-one combination valve. “It integrates six valves into one housing, greatly improving installation efficiency. Work that took one person eight hours can now be done in 20 minutes. For maintenance, only the valve core needs replacement.”

Dofun has many such products. The company now holds over 30 invention patents, has broken through international technical barriers, and its products have achieved a 60% substitution rate for similar imported products in the domestic market. In 2023, the company took the lead in formulating domestic industry standards for refrigeration valves, demonstrating its professional strength and technological leadership.

This commitment to “quality is king” has resulted in an ultra-low product failure rate of just one part per million.

“Our products are traceable; each has a worker ID. We also have process flow cards, and each person has their own sign-off record. Every station and process step is assigned to a responsible individual. If a problem occurs, the worker ID and flow card make it easy to trace the issue,” Wang Chao explained. This process traceability effectively enhances production control efficiency and ensures product quality.

Furthermore, Dofun collaborated with Huawei to introduce an intelligent visual inspection system, automating valve air tightness quality inspection. This upgrade reduced labor needs, improved inspection accuracy, and lowered the risk of defective products leaving the factory. Post-upgrade, one operator can now manage two inspection devices instead of one.

In technological innovation, Dofun, in collaboration with Liaocheng University, successfully developed a new alloy steel material after persistent effort. This material performs excellently, withstands ultra-low temperatures down to -196°C, and offers outstanding impact resistance and pressure endurance at low temperatures.

Regarding Dofun’s future direction, Wang Chao believes that as technology advances, refrigeration valves, as key fluid control components, will see development trends towards intelligence, automation, high efficiency, energy saving, and environmental sustainability. These directions align with industry trends and global demands for efficiency, environmental protection, and smart technology.

“Currently, we are actively negotiating collaborations with universities. By researching fluid dynamics, we aim to optimize the internal structure of valves, reduce fluid resistance, improve fluid control precision, and ultimately design more efficient and precise valves,” Wang Chao said. This pursuit of even higher-quality, “hard-core” products is the future direction Dofun is exploring.