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Sany set to build US$60m US facility

By Wan Zhihong (China Daily)
Updated: 2007-09-13 12:44

Chinese construction machinery firm Sany Heavy Industry Co yesterday signed a memorandum of understanding (MoU) with the US state of Georgia to build a manufacturing facility with an investment of US$60 million.

The company plans to acquire land of 1.06 million sqm in Georgia's Peachtree City to build the manufacturing facility, it said in a statement yesterday.

The project is subject to regulatory approval, the statement said.

If approved, it will be the company's second overseas manufacturing facility. The company earlier signed an MoU to develop a US$60 million plant in India.

"The project in the US will further boost our competence in the global market, especially in the US, which is the world's largest construction machinery market," said He Zhenlin, vice-president of Sany Group.

The factory would make Sany the first Chinese construction equipment maker to own a plant in North America, home to industry giants like Caterpillar Inc.

Earlier media reports said Sany plans to set up a project in Belgium, which would be its first in Europe. But He declined to make any further comment on the project.

Based in Central China's Hunan Province, Sany is a major player in the country's construction machinery industry. But exports - mostly to developing countries - account for less than 20 percent of Sany's sales revenue.

The company exported over 400 million yuan (US$53 million) last year and in the first half of this year that figure exceeded 500 million yuan, said He.

"Sany has been trying to increase its export capacity. This year our exports will see 100 percent growth."

The company's sales revenue for the first six months of the year was 4.4 billion yuan, an increase of 80 percent. Its profit was 824.5 million yuan - three times that of a year earlier.

Like Sany, other Chinese machinery firms are shifting focus to the overseas market. Liugong Machinery Co Ltd, a leading heavy machinery manufacturer in South China's Guangxi Zhuang Autonomous Region, plans to open an assembly plant in India this year.

Liugong said the investment is part of a strategy to boost its global business. It is also investigating the possibility of establishing a plant in Russia once the Indian facility opens.

Foreign investors have been active in China's machinery sector in recent years. US machinery giant Caterpillar last year said it will move its Asia-Pacific headquarters from Tokyo to Beijing.

Operational and sales success in China is critical for the company's long-term growth and profitability, the company said.


(For more biz stories, please visit Industry Updates)



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