Cargotec to expand offering and presence in China through joint venture with China National Heavy Duty Truck Group Co., Ltd
CARGOTEC CORPORATION, STOCK EXCHANGE RELEASE, 12 JULY 2012 AT 12.00 NOON (EEST)
Cargotec is planning to establish a joint venture with China National Heavy Duty 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.
For further information please contact:
Pekka Vauramo, COO, Deputy to CEO, tel. +358 20 777 4101
Eeva Sipilä, Executive Vice President, CFO, tel. +358 20 777 4104
Axel Leijonhufvud, Executive Vice President, Load Handling, tel. +46 705 98 3176
Paula Liimatta, Director, Investor Relations, tel. +358 20 777 4084
Cargotec improves the efficiency of cargo flows on land and at sea - wherever cargo is on the move. Cargotec's daughter brands, Hiab, Kalmar and MacGregor are recognised leaders in cargo and load handling solutions around the world. Cargotec's global network is positioned close to customers and offers extensive services that ensure the continuous, reliable and sustainable performance of equipment. Cargotec's sales totalled EUR 3.1 billion in 2011 and it employs approximately 10,500 people. Cargotec's class B shares are quoted on NASDAQ OMX Helsinki under symbol CGCBV. www.cargotec.com
CNHTC is a leading Chinese manufacturer of heavy duty trucks on mainland China, and is the parent company of Sinotruk. The company posted total sales of around 160,000 units in 2011. CNHTC has made huge progress in expanding in overseas markets, its products being sold in approximately 100 countries. The company specialises in the research, development, manufacture and sale of heavy trucks and the related key parts and components. Its products service a wide range of customers, representing all major industries, including the infrastructure, construction, container transportation, logistics, mining, steel and chemical industries. CNHTC entered into a strategic partnership with the German heavy commercial vehicle maker MAN SE in 2009.