Palfinger Hopes to Announce China Venture in ‘Next Weeks’
Palfinger AG (PAL), the world’s biggest maker of truck-mounted cranes, hopes to make an announcement on a joint venture with a Chinese crane makers in the “next weeks.”
“I am confident that talks will be completed in the next few weeks,” Chief Executive Officer Herbert Ortner said in Vienna today. “China hopefully will be our biggest market within the next five or six years.”
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, adding that the company was in “advanced” talks with one or two large Chinese building-equipment manufacturers. The probability of completing a deal in the first half is “very big,” he said, declining to identify potential partners.
Among China’s biggest construction equipment makers are Guangxi Liugong Machinery (000528) Co., Lonking Holdings Ltd. (3339), Sany Heavy Industry Co. (600031), Shantui Construction Machinery Co. (000680) and Anhui Heli Co., according to data compiled by Bloomberg. Palfinger competitor Cargotec Oyj (CGCBV) announced plans in July for a joint venture with Jiangsu Rainbow Heavy Industries Co. to manufacture cargo cranes in China.
The initial joint venture shouldn’t cost more than “a few hundred million euros,” which can be paid out of cash flow or liquidity provided by banks, the chief said, adding that Palfinger has approval for a share sale, should additional funds be required later.
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