Cargotec to expand offering and presence in China through joint venture with China National Heavy Duty Truck Group Co., Ltd
Truck Group Co., Ltd (CNHTC), a leading Chinese manufacturer of heavy duty
trucks and the parent company of Sinotruk. This will enable Cargotec to expand
its presence in the Chinese load handling market.
Cargotec would have 50 percent ownership in the joint venture. Over a planning
horizon of several years, total investment costs of the joint venture would be
around EUR 100 million. Cargotec's estimated equity investment during the first
year is approximately EUR 10 million.
The transaction is subject to the relevant regulatory approvals, which are
expected in the next six to nine months.
CNHTC's extensive network, including dealers and service stations all over
China, would be used by the joint venture for the distribution, sale and service
of Cargotec's Hiab cranes and hooklifts.
The joint venture would also further develop CNHTC's existing truck crane
offering and production base for the Chinese market. By combining both
companies' technical know-how, the joint venture is expected to become a
significant player in the truck crane business in the near future, particularly
in China.
"This joint venture represents an important strategic step for Cargotec,
demonstrating our commitment to growing our offering and presence in China.
Cargotec's strong existing range of load handling equipment, combined with
CNHTC's leading position in the Chinese heavy truck market, will secure a fast
and cost-effective channel for placing Hiab equipment in the hands of customers
all over China," says Mikael Mäkinen, President and CEO, Cargotec.
"Cargotec's long experience of technical innovations makes it the perfect
partner for the joint development of a new truck crane range tailored to the
needs of Chinese customers. Together, we expect to build world-class expertise
with the purpose of securing a strong market position for truck cranes," states
Mr. Wei Zhihai, Vice President of CNHTC.
Double-digit growth in the total market for load handling equipment in China is
expected over the next years, driven by robust demand for new equipment and
replacements and for greater efficiency in the infrastructure, industrial and
property sectors, as well as by urbanisation. Cargotec estimates the existing
market for truck-mounted cranes in China to be around 10,000 units, dominated by
local manufacturers.
The main market for truck cranes is China with around 35,000 units sold in
2011.
Cargotec has had a presence in the Asia-Pacific region for more than 30 years,
with its own representation and operations for Load Handling business since
1973. Today, Cargotec has five factories in the Asia-Pacific region.
Morgan Stanley acted as financial advisor to Cargotec.
