Chinese firm sets up joint venture with Indian partner

Beijing, Aug 21 (IANS) Chinese construction equipment manufacturer Zoomlion Tuesday clinched a deal to set up a joint venture plant in India with ElectroMech, India's largest industrial crane manufacturer, Xinhua reported.

He Wenjin, vice president of Changsha Zoomlion Heavy Industry Science and Technology Development Co. Ltd., said the joint venture will be Zoomlion's first directly-invested overseas plant, with Zoomlion holding a 70-percent stake and ElectroMech owning the remainder.

After signing the agreement with ElectroMech in Changsha in central China's Hunan province, he said Zoomlion has a long-term strategy in the Indian market and plans to invest $100 million to bolster its business development in India in the next few years.

He said the two partners hoped the joint venture plant, which will specialise in tower crane production, will realize $50 million in annual sales in five years.

Tushar Mehendale, managing director of ElectroMech, said it was a fine time for Chinese machinery producers to invest in India's heavy machinery industry, as India has planned to invest $1 trillion on infrastructure construction in the next five years.

Last year, India's tower crane industry saw total revenue of $93 million.

Industry insiders expect the sector to maintain an annual growth rate of more than 20 percent in the next decade.

The Hong Kong-listed Zoomlion, one of the world's leading construction machinery producers, acquired Italian concrete machinery producer CIFA in 2008 to gain a foothold in the foreign market and boost its overseas sales.