Tai’an Dongyue employs 900 people in a new factory in Tai’an City, Shangdong Province, about 300 miles (350km) south of Chinese capital Beijing. The company was founded in 1972 and ranks beneath XCMG, Zoomlion, and arguably Terex Changjiang in mobile crane production volumes and sales.
“We want to be manufacturing the closest we can to the market, and China is the fastest-growing construction market in the world,” Manitowoc Crane Group president Eric Etchart told Cranes Today in an interview after the announcement was made at a Manitowoc press conference at Las Vegas’s ConExpo exhibition. “China is a key market for Manitowoc. Manufacturing there is central to this objective. Through this presence we will also have a better understanding of our Chinese competitors which in turn will help us on the global stage.”
Etchart said that both halves of the joint venture agree on the general strategy for the company. “We are sharing a bed with them and dreaming the same dreams,” he said. “Tai’an is a major player, and there is space to grow the market.”
The acquisition is not the first involvement of foreign businesses in the mobile crane business, nor is it Manitowoc’s first Chinese venture. In 2006, Terex bought a 50% stake in Chinese mobile crane manufacturer Changjiang Crane. And Manitowoc bought a stake of, and then purchased the remainder, of a Zhangjiagang, China tower crane manufacturer, and has used it to manufacture Potain-brand tower cranes.
In the press conference, Etchart said: “We want to replicate the successful business model of Potain tower cranes. We invested in a Chinese company and gained significant market share.”
Etchart said that Manitowoc has a long-term plan for development of the venture. “We have a lot of work to do with this project. The existing line we will need to refine, and understand it better,” he said. “We will not be exporting cranes tomorrow.”
Manitowoc will rotate teams of employees, and also move permanent staff to China to manage the business, Etchart said. It will export experts from its Shady Grove, USA facility, which is the Manitowoc truck crane center of excellence. The recently-appointed Manitowoc senior vice president in charge of Asia, Thomas Wang, has been named general manager of the new venture.
The Chinese government limits foreign ownership of Chinese manufacturers of road-going machinery to 50%. Asked if Manitowoc would have bought the company outright if it could, Etchart told Cranes Today: “We probably would have bought it in two stages anyway. It’s a learning process.”
Etchart said that although the deal had been progressing for months, the company only received final permission from the Chinese authorities in early March.
* The deal is a sign to Chinese manufacturers that crane manufacturing is a global business, said Yanming Xiong, Zoomlion mobile crane branch general manager, in an interview with Cranes Today at ConExpo. “It is natural for Chinese manufacturers to get investment of foreign capital.”
