Germany-based Demag Cranes and the Weihua Group in China have agreed to intensify their co-operation and to conclude a strategic alliance in the crane business.
Demag is a leading supplier of industrial overhead cranes and port cranes. Weihua Group is major industrial crane manufacturer in China.
Aloysius Rauen, chairman of the Board of Demag Cranes AG, and Han Xianbao, chairman and president of the Weihua Group, signed a letter of intent in Beijing for closer co-operation. Demag Cranes will initially acquire a minority interest in the Weihua Group's crane business with the option of taking a majority stake in the medium term. Both companies have agreed on exclusivity regarding further negotiations.
Weihua Group's crane business includes the manufacture and marketing of industrial cranes, harbour cranes and crane components. The Henan-based company in central China was founded in 1988, employs 5,000 people and generated revenue around US$ 366 million in 2009. Xianbao and his family have a 100 per cent holding in the Weihua Group.
Commenting on the agreement, Aloysius 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 underscores Demag Cranes' resolve, as communicated in the context of our stand-alone strategy, to foster its position in the growth markets also through acquisitions and to contribute actively to the consolidation process in our industry."
Han Xianbao at Weihua said, "Demag Cranes is one of the world's leading suppliers of industrial cranes and port technology and Weihua Group is the largest manufacturer of industrial cranes in China. 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 co-operation with Demag Cranes is an excellent opportunity for Weihua to use and develop new products together and to tap into international markets, where Demag Cranes is well positioned with its worldwide renowned Demag and Gottwald brand names, thus achieving a win-win situation."