Feb. 29 (Bloomberg) -- Sany Heavy Industry Co., run by China’s richest man, and Palfinger AG, the world’s biggest maker of truck-mounted cranes, will invest 900 million yuan ($143 million) in a venture to make and sell mobile cranes.
The venture, Sany Palfinger SPV Equipment Co., will be based in Changsha in central China’s Hunan province, Sany said in a Shanghai Stock exchange filing yesterday. The two companies will also invest as much as 4 million euros ($5.4 million) to set up a sales unit in Salzburg, where Austria’s Palfinger is based.
The Chinese construction-equipment maker’s agreement with Palfinger is a “big measure for Sany Heavy’s drive to the global crane market and overseas strategy” and will raise “the two companies’ ability to innovate,” Sany said.
The companies are investing even as construction growth has eased in China after the government seeks to cool property speculation. Home sales rose at the slowest pace in three years in 2011 and expansion of real estate investments slowed to 28 percent from 33 percent in 2010.
Palfinger’s global sales network and services will “significantly raise Sany cranes’ globalization,” said Sany, controlled by Chairman Liang Wengen.
The China venture start this year and will be fully operational by 2013, Palfinger said in a separate statement. The sales unit in Salzburg will open immediately and will be fully operational by year-end, it said.
Palfinger, led by Chief Executive Officer Herbert Ortner, said in August that expansion to China was a top priority for management. Ortner said on Feb. 3 that he hoped to announce a China venture in the “next weeks.”
Expanding in China, where Palfinger already has a plant in Shenzhen, is the most important step for the company since its 1999 initial public offering, Ortner said this month, adding that it “hopefully will be our biggest market within the next five or six years.”
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