Terex Corp has five ventures in China, which have manufactured off-highway trucks, truck cranes, gantries, forklifts, and material-processing equipment since 1988. [Photo / China Daily]
CHANGZHOU, Jiangsu - The US equipment manufacturer Terex Corp is aiming to increase its annual revenue from the current $300 million to $1 billion in the next three to five years, through expansion by heavy investment."China is an important part of Terex's growth plan for becoming a $10-billion revenue company by 2015, as its robust economic growth is fueling a strong market for most of our products," said Ron DeFeo, chairman and chief executive officer of Terex.
"China only contributed 8 percent of our $4.4 billion net revenue last year, but in my view, it should occupy 20 percent in the future," he added. "The future growth will require heavy investment here."
DeFeo came to China on Wednesday to inaugurate his company's first wholly owned local facility in Changzhou, Jiangsu province, which will manufacture aerial work platforms under the "Genie" brand name.
"As safety and efficiency issues will be a top priority for the Chinese government during the 12th Five-Year Plan (2011-2015), I believe the country's aerial work-platform sector is going to boom," said Ken Lousberg, president of Terex China.
He told China Daily that the company is in discussion with the Chinese government to help establish a safety standard for aerial work, "not only for business, but also for the whole society".
Tim Ford, president of Terex Aerial Work Platforms, said that although the sector in China has a relatively small market - between $100 million and $150 million - it will grow by at least 20 percent annually in the coming few years, and has the potential to become a substantial market.
At present, Terex mainly provides platforms for the shipbuilding, aviation, and construction industries in China. "We hope to have customers in more industries," said Lousberg.
DeFeo said the company will soon announce a new 50-50 joint venture to produce its cranes locally.
The operation will be based on Terex's five existing ventures in China, which have manufactured off-highway trucks, truck cranes, gantries, forklifts, and material-processing equipment since 1988.
"We also have gained approval to open a leasing company, providing financial services to Chinese consumers," said DeFeo.
Last year, Terex spun off its mining-equipment business for $1.5 billion to Bucyrus Inc, which makes mining equipment and entered into an agreement to be acquired by Caterpillar Inc for $7.6 billion in November last year. "Thus we have a substantial amount of capital to invest," said DeFeo.
According to the Ministry of Housing and Urban-Rural Development, China will speed up construction of urban public facilities by investing 7 trillion yuan ($1.07 trillion) during the 12th Five-Year Plan.
The plan will boost the nation's construction equipment sector - which accounts for more than half the global industry - during the coming years.
The National Development and Reform Commission forecast that sales revenue for the construction equipment industry in China will more than double to 900 billion yuan in 2015, from approximately 400 billion yuan in 2010.
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