09.01.2007

Kato in European move

Japanese crane producer Kato is close to finalizing an agreement with the Rigo family to establish a new European crane producer called EuroRigo.

The new company which was originally due to be established in February will be 80 percent owned by Kato and 20 percent by the Rigo family.

The two parties are putting up €3 million of capital. It is not clear how much of this will be cash and how much will comprise intellectual property and other tangible assets currently owned by Autogru Rigo.

The business will be located north of Verona at an existing Rigo facility, it will initially employ 40 staff.

Both Rigo and Kato are vague about the exact product line the new company will begin with, but it is likely to include re-engineered versions of the current Rigo All Terrain line.

The new venture will also begin to design new products developed jointly by existing Rigo and Kato engineers. The new products are likely to be marketed under the Kato brand name.

A statement from Kato said: "Kato has been planning to expand its product range of mobile cranes to strengthen its mobile crane business in the worldwide market. opening a manufacturing base in Europe is one of the key strategies to adapt to the future demands for mobile cranes."

Rigo currently builds a range of All Terrain and Rough Terrain cranes along with a few self propelled boom lifts.

The Rigo business is expected to continue alongside the new Eurorigo venture, at least in the short term.

Vertikal Comment

This is a surprise story which appears to have leaked out before planned and it appears to have even preceded the final signatures.

Looking beyond the vague announcements it looks as though Kato is launching a partial and staged takeover of the Rigo crane business. The plan being that it will produce updated versions of Rigo cranes under the Rigo brand name, then as it develops new products that satisfy its own design and quality criteria the Kato brand will come into play.

Eventually it might look at producing European versions from the current or future Kato Japan line up. Perhaps if all goes well the company name might eventually be changed to Kato Europe?

In many European markets Kato products, which have not been sold here for some time, are highly regarded. The brand is well respected and the company has an exceptional reputation for reliability and low operational costs. It will be very wary of spoiling that.

When competitor Tadano was looking for a European base it initially chose Holland for distribution and then moved to Germany for production. German and Japanese production philosophies and even management styles are relatively compatible.

The same cannot always be said of Italian and Japanese thinking and attitudes so it is going to be very interesting to watch how this new business develops. This is not of course the first time that Kato has looked at an Italian crane venture, around 10 years ago it had a flirtation with Marchetti that hardly got of the ground.

Northern Italian industry is quietly among the most efficient in Europe, so if Kato and Rigo can get the chemistry right the venture could prove to be a great success.

Watch this space.