Demag Cranes | China | Weihua Group--Demag Cranes forms Chinese alliance

German-based industrial, port and overhead crane manufacturer Demag Cranes has formed an alliance with Chinese crane manufacturer Weihua Group.

Aloysius Rauen, chairman of Demag Cranes and Han Xianbao, chairman of the Weihua Group formalised the agreement with a letter of intent in Beijing.

As part of the agreement, Demag Cranes will initially acquire a minority interest in the Weihua Group's crane business. Weihua has agreed to grant Demag Cranes the option of participating in the management of the group by taking a majority stake in the medium term. Both companies have agreed on exclusivity regarding further negotiations.

The Weihua Group manufactures and sells industrial, harbour and tower cranes as well as crane components and it is one of the few suppliers in China with extensive regional representation. The company's headquarters is in Henan (Changyuan County) in Central China.
The group - founded in 1988 - employs 5,000 and generated revenues of RMB 2.5 billion (about € 270 million) with its crane business in 2009.

Xianbao and his family own 100 percent of Weihua and the agreement stipulates that he will continue to hold a leading position in the company in future.

Rauen said: "Our planned strategic alliance with Weihua is a major step for our company. We will be able to strengthen our position in the dynamically growing Chinese market considerably. The letter of intent signed today also underlines Demag Cranes resolve to foster its position in the growth markets also through acquisitions and to contribute actively to the consolidation process in our industry."

Xianbao added: "Our company has grown significantly in the crane sector in the past few years and, being one of the leading manufacturers in China, has enormous further potential especially in steel production, railway industry, hydraulic engineering as well as port and terminal fields of application. The planned cooperation with Demag is an excellent opportunity for Weihua to use and develop new products together and to tap into international markets, where Demag is well positioned with its worldwide renowned Demag and Gottwald brand names, thus achieving a win-win situation."

Source: Vertikal.net