Palfinger and Sany joint ventures

By Alex Dahm28 February 2012

Xiuguo Tang, Sany Group president, left, and Herbert Ortner, Palfinger CEO

Xiuguo Tang, Sany Group president, left, and Herbert Ortner, Palfinger CEO

Sany and Palfinger have signed two joint venture agreements to sell and distribute each others' cranes.

The purpose of the deal is to increase Palfinger market share in China and Sany market share outside the country. Two new companies will be established in a venture that will see a total of around €200 million (US$ 270 million) invested over the next few years, Herbert Ortner, Palfinger CEO, told IC.

Sany in China and Palfinger in Austria will each hold a 50% share in the two new companies. Changsha, China-based SanyPalfinger will manufacture and sell Palfinger knuckle boom cranes in China while Austria-based PalfingerSany will distribute wheeled mobile cranes produced by Sany in the world market outside China.

The new company will have exclusive distribution on Sany all terrain, rough terrain and truck cranes in Europe, Russia and CIS. To do this a complete new and separate organisation will be created. Suitable existing Palfinger dealers will have an opportunity to take on Sany distribution, Ortner said.

A majority of the investment will be in China to set up a factory with capacity to produce 10,000 knuckle boom and straight (stiff) boom loader cranes to mount on trucks. Up to 1,000 jobs will be created, Ortner told IC. Ortner forecasts sales in the region of €200 to 300 million in the next three to five years in China, after the the factory has been established and production is ramped up.

Palfinger's main business is cranes but it also produces truck mounted aerial work platforms, hook loaders, tail lifts and other material handling machinery. Cranes will be the initial focus of the joint ventures but work could start with the aerial work platforms as soon as 2013, Ortner told IC, followed by the hook loaders.

Ortner said, "With the establishment of these two joint venture companies, we have taken a big step forward in our internationalisation strategy. We now have manufacturing and assembly plants in all of the world's major markets. With Sany we have a partner that is not only one of the fastest growing companies in the world, but one that meets our high quality standards as well. Together with Sany, we have laid the foundation for holding our own on a long-term basis in an increasingly aggressive competitive environment and for expanding our leadership position in the global market. China will become our second domestic market. By enabling our partners outside China to distribute Sany mobile cranes we are giving them a valuable addition to their range of products."

Liang Wengen, Sany Heavy Industry chairman, said, "For Sany, this close co-operation with Palfinger is a major step towards tapping the global market. We will use Palfinger's dense, international sales and service network to promote the globalisation of Sany from a Chinese perspective. We are looking forward to our co-operation with a partner that is a technology and market leader and whose customer proximity and comprehensive services are highly appreciated by its customers. We are fully convinced that these two joint ventures will swiftly achieve success, thereby making a significant contribution to the rapid and sustained growth of Sany."

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