Cargotec to form joint venture in China
Cargotec, owner of Hiab and Kalmar is to form a joint venture with Jiangsu Rainbow Heavy Industries (RHI) in China. It will invest €30 million to acquire a 49 percent stake in the business.
RHI already supplies Cargotec with hatch covers for its MacGregor business, and as part of the joint venture deal it plans take a stake in the company by acquiring a 49 percent interest in Hong Kong based China Crane Investment Holdings from Carlyle Asia Growth Partners IV, for €50 million. China Crane owns 18.75 percent of the shares of RHI.
The joint venture will focus on ship-to-shore cranes, rubber-tyred gantry cranes, rail mounted gantry cranes and marine specialty cranes. At the start, majority of the production will be exported, but it is hoped that as the Chinese market for this type of product grows the domestic sales will increase.
Cargotec chief executive Mikael Mäkinen said: "This joint venture will be a strategically important step for Cargotec to expand its presence and offering as well as to improve competitiveness in China. RHI's local presence, knowledge and experience, combined with Cargotec's technology competences, access to global markets and established brand, offer the joint venture an excellent position in the market and enable close cooperation with customers in Asia-Pacific".
Wu Jian, chairman of RHI added: "A joint venture with Cargotec would provide us access to global markets and remarkable growth. By joining forces we create a company that is expected to be a significant player in the market with a globally competitive product portfolio".
The transaction is subject regulatory approvals, which could take six to eight months. Delaying the joint venture start until early 2012.