BIZCHINA / Biz Media Digest |
Machinery: Sany may open US plant in 2007(chinaview.cn)Updated: 2007-02-14 15:58 Domestic machinery maker Sany Heavy Industry Co aims to start assembling gears in the United States this year as it seeks expansion overseas, company executives said. Privately owned Sany last year won government approval to build a plant in the United States, with a planned initial investment of US$9 million, which would rise to US$50 million after three years. The planned factory would make Shanghai-listed Sany the first Chinese construction gear maker to own a plant in North America, home to industry giants such as Caterpillar Inc. and Terex Corp. "We are still selecting a site for the facility. The candidates have been narrowed down to the San Francisco and Atlanta areas," executive president and vice chairman Xiang Wenbo, said. "We will make a decision as soon as possible. Production should start within the year." Another senior executive said the company was already selling its products, such as concrete pumps and blenders in the United States on a trial basis. Domestic manufacturers have been making inroads into developing countries in Southeast Asia, Africa and the Middle East, but a foothold in mature markets remains a dream for many. In July, China's Nanjing Automobile Group surprised the auto world by announcing plans to build the country's first US car plant, in Oklahoma, offering a full range of sports cars and sedans, based on technologies bought from failed British automaker MG Rover. The firm announced last November that it planned to set up a US$60 million factory in India, one of the China's largest investments in the South Asian nation so far. Sany, which has said it would fund the US plant mostly with its own resources, is now awaiting regulatory approval to place up to 50 million new A shares with select institutional investors to raise money for expansion. The offer, which would account for up to 9.43 percent of Sany's enlarged share capital, is expected to raise as much as 1.62 billion yuan (US$209 million). Xiang said talks with potential subscribers were still proceeding. He ruled out the possibility of selling the shares to just one investor, domestic or foreign. Sany's stock has gained more than 110 percent since executives at the company said in mid-October it was planning to build the US plant. The gain was also linked to US private equity company Carlyle's bid for Xugong Group Construction Machinery Co, China's largest construction equipment maker, as the move highlights the value of the sector, analysts say. Sany has said the Carlyle offer had undervalued Xugong Group Construction Machinery Co. (For more biz stories, please visit Industry Updates)
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