Seeking to gain a larger presence in the Chinese truck-mounted crane and load handling market, Cargotec announced new joint venture with China National Heavy Duty Truck Group (CNHTC).
CNHTC or Sinotruk Group manufactures heavy-duty trucks.
Under the deal, Cargotec would use CNHTC’s dealers and service stations in China for distribution, sale and service of Hiab cranes and hooklifts.
CNHTC would use the venture extend its existing truck crane production and offerings for the Chinese market.
With production capacity available, venture partner Cargotec has five factories in the Asia-Pacific region.
The establishment of the project is subject to regulatory approvals, expected in the next six to nine months.
Potentially owning 50% in the venture, Cargotec’s estimated equity investment during the first year is approximately €10 m. Total investment costs of the joint venture is an estimated €100m.
As a manufacturer operating for many years the Asia Pacific region with its own load handing representation, operations and production facilities, Cargotec estimates the existing market for truck-mounted cranes in China to be around 10,000 units, dominated by local manufacturers.
In 2011, the main market for truck cranes in China was 35,000 units, says Cargotec.
Carogtec estimates that double-digit growth in the total market for load handling equipment in the country will occur over the next years.
Contributing to market growth, the country demands greater efficiency in the infrastructure, industrial and property sectors, and is undergoing urbanization, the company said.
Mikael Mäkinen, president and CEO, Cargotec, comments on the company’s goal of increasing its presence 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.
“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,” says Mäkinen.
Wei Zhihai, vice president of CNHTC says, “Together, we expect to build world-class expertise with the purpose of securing a strong market position for truck cranes.”