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Construction machinery giants plan joint venture

By Tong Hao (chinadaily.com.cn)
Updated: 2008-12-17 18:25

Xuzhou Construction Machinery Group (XCMG), China's largest construction machinery maker, plans to set up a joint venture with Korean counterpart Doosan Group to produce heavy machinery engines, a senior company official said.

The joint-venture, in which XCMG will hold a 51 percent share and Doosan 49 percent, is expected to be established in the first half of 2009 if talks between the two sides proceed as planned, China Business News reported, citing Zhang Yuchun, XCMG's deputy manager.

The first phase of the project, which is designed to produce 4 to 8-litre heavy engines, will cost 500 million yuan, Zhang said.

The venture will be based in Xuzhou, Jiangsu Province, where XCMG is located.

Doosan Group, 80 percent of whose sales are comprised of construction machinery, engines and other engineering businesses, is the 9th largest financial group in South Korea.

XCMG recorded sales of 35.2 billion yuan during the first 10 months of 2008. Despite the financial crisis, Zhang is confident that XCMG will achieve the 40-billion-yuan ($5.84 billion) objective by the end of the year.