Metso continues to widen its market footprint in China, most recently by acquiring a manganese steel foundry in Quzhou City, Zheijang Province, about 400 km southwest of Shanghai. According to the company, the acquisition—announced in early February—will improve its capability to supply wear parts to customers in China and other Asian Pacific markets. The foundry transaction involves the acquisition of assets of Quzhou Juxin Machinery Co., Ltd. and Quzhou Chixin Machinery Co., Ltd.
“The acquisitions…and the joint venture with LiuGong Group Corp. Ltd. announced last November, significantly strengthen our supply capabilities for mining and construction industries in China. Metso now has a complete range of capital equipment and wear parts covering a wide range of customer requirements. By acquiring a new steel foundry in China we are able to better serve the needs of our Chinese customers,” said Andrew Benko, president of Metso’s Mining and Construction business.
Metso said it currently has five foundries and a network of external casting suppliers serving its mining customers. The existing foundries are located in Ahmedabad, India; Isithebe, South Africa; Prerov, Czech Republic; Sorocaba, Brazil; and Tampere, Finland. Juxin Machinery had been a supplier to Metso before the acquisition.
In addition to the foundry, Metso also expanded its presence in the Chinese equipment market through a joint venture with LiuGong Group and acquisition of Shaorui Heavy Industries Ltd., both announced in November 2012.
Metso and LiuGong Group will form a joint venture to develop track-mounted crushing and screening business in China. The joint venture, according to Metso, will combine its expertise in track-mounted crushing and screening technology with LiuGong’s distribution resources, comprising about 900 outlets, and manufacturing capabilities in China.
Founded in 1958 in Liuzhou, China, LiuGong is claimed to be the largest wheel loader manufacturer in the world, and also offers full product lines of other mobile construction equipment.
The initial scope of the joint venture will cover the design and manufacture of localized versions of Metso’s Lokotrack 1000 series mobile crushers and screens; the range may be further expanded in the future. The products will be sold under a ‘Metso LiuGong’ brand. The joint venture company will also promote Metso’s global track-mounted crushing and screening equipment in the growing Chinese market.
Metso also intends to acquire 75% of Shaorui Heavy Industries, a Chinese mid-market crushing and screening equipment producer, and has an option to purchase the remaining 25% of the company later. In addition to enabling greater access to the Chinese mid-market equipment sector, Metso said the acquisition will allow it to offer a better product portfolio for penetrating new markets in Asia and Africa.
Shaorui Heavy Industries is headquartered in Shaoguan, Guangdong province. It has 18 sales and services centers, as well as a manufacturing facility in southern China that is expected to complement Metso’s manufacturing unit in Tianjin.
The respective costs of the acquisitions were not publicly disclosed.
In 2011, Chinese buyers were among Metso’s biggest customers in terms of net sales, which totaled $1.01 billion. Metso said it estimates that the Chinese construction equipment market alone is estimated to reach $100 billion by 2016, driven by urbanization and infrastructure development, and offers great growth opportunities. Currently, Metso Group has more than 3,200 employees in China.