30 August 2012

Demag Cranes and Weihua Establish Joint Venture in China

Duesseldorf - 30 August 2012 - Demag Cranes, one of the world’s leading suppliers of industrial cranes and crane components, has established a joint venture with Weihua, one of China’s largest crane manufacturers. The joint venture Demag Weihua (Liaoning) Material Handling Machinery Co. Ltd will be responsible for the development and production of components and parts for cranes and hoists in the mid-market segment. Demag Cranes will hold 51% of the company, Weihua will have a share of 49%

The joint venture will have two production plants located in Kaiyuan and Shanghai. In Kaiyuan, a city in the north-east province Liaoning, the joint venture will manufacture components, motors and parts for gearboxes. Final assembly of mid-price segment products (so-called Bas products), such as rope and chain hoists, crane end carriages, drive systems and light-crane systems, will take place at the plant in Shanghai, where the head office of the Chinese regional subsidiary of Demag Cranes is located. In addition, the development activities for mid-price segment products will be merged and further strengthened in Shanghai. 

In recent months, Demag Cranes has launched its Bas products for the mid-market segment in China and India. These products are based on proven European engineering standards and are designed to meet the exact needs of customers in emerging-market countries. 

The joint venture will be responsible for manufacturing the Bas products that the two shareholders Demag Cranes and Weihua will offer via their own established sales channels. 

Aloysius Rauen, Chief Executive Officer of Demag Cranes AG explains, “We are combining the expertise of two strong partners in our joint venture. This will enable us both to benefit from the broad range of Bas products with the globally recognised Demag brand name and Weihua’s strong presence in China. Weihua and Demag Cranes will continue to expand their positions in dynamically growing market with the new joint venture.” 

Han Xianbao, Chairman and President of the Weihua Group explains: “The establishment of our joint venture marks a further milestone in our growth strategy.” With Demag Cranes, which is a world leader for cranes and hoists, we are confident that we have found a reliable partner to serve the mid-market segment and, therefore, to expand our leading position in the Chinese crane market even further. At the same time, the joint venture with Demag Cranes will offer us significant growth opportunities in the international markets in the future. Our partners as well as our customers will benefit equally from this new alliance.” 

The crane business of the Weihua Group includes the manufacture and marketing of industrial cranes, harbour cranes and crane components and it is one of the few suppliers in China with pan-regional representation. The company has its head office in Henan province (Changyuan County) in central China. Established in 1988, the group currently employs some 5,000 staff in its crane business line. Crane business revenue amounted to RMB 4.0 billion (approx. EUR 513 million) in 2011. Chairman and President Han Xianbao and his family hold 100 per cent of the shares in Weihua. 

The Demag Cranes Group is one of the world’s leading suppliers of industrial cranes and crane components, harbour cranes and terminal automation technology. As a global supplier, Demag Cranes manufactures in 16 countries on five continents and operates a worldwide sales and service network that is present in over 60 countries through its subsidiaries such as Demag Cranes & Components GmbH and Gottwald Port Technology GmbH, agencies and a joint venture. In financial year 2010/2011, the Group, with its 6,115 employees, generated revenue of EUR 1,062.3 million. Since August 2011, the Terex Group in the United States has held a majority share in the company. 

Source: Demag Cranes