Kobelco Cranes Co. last week said it will establish a joint venture in China for manufacturing crawler cranes.
Chengdu Kobelco Cranes Co. will be created in October at a capitalization of 2 billion yen (about U.S. $23.3 million). Kobelco Cranes will put up 51 percent of the capital, with local partner Sichuan Chengdu Chenggong Construction Machinery Co. contributing the rest.
The joint venture will build a factory on a 133,000-square-meter plot in Sichuan Province. The facility, which is expected to take up about 6,900 square meters of the plot, is scheduled to kick off operations in August 2012. It will be Kobelco Cranes' second overseas production base after one in India. Kobelco Cranes will become the first Japanese company to produce crawler cranes in China. Including a model with a 250-ton lifting capacity, the joint venture plans to manufacture 80 units annually within five years.
The Japanese firm has been exporting several crawler cranes a year to China. As demand for them continues to surge due to a large number of infrastructure and mining projects, the company decided to make higher-end models in China. To secure profit margins, Kobelco Cranes plans to eventually have locally made parts account for 45 percent of Chinese production.
Kobelco Cranes estimates that its share of the global crawler crane market fell from 28.4 percent in 2005 to 17.4 percent in 2009.