The joint venture agreement formed between
Manitowoc Company, Inc.
) and Shantui Investment Co., Ltd. ("Shantui") came to a
premature end as Shantui opted out of the venture citing weakness
in the Chinese construction machinery market. The collaboration
to produce truck cranes had immense potential and was expected to
revitalize the Chinese construction machinery industry.
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The joint venture came into being in 2008 when Dongyue Heavy
Industry Company was acquired by Manitowoc from Taishan Heavy
Industries. Following the acquisition, Shantui and Manitowoc
agreed to jointly invest in the company with Shantui owning 51%
equity interest and the balance 41% held by Manitowoc.
The joint venture was planned to be engaged in the production of
truck cranes, truck mounted cranes, and related parts and
accessories. It also engaged in research and development, and
offered training and after-sales support to customers. The joint
venture was expected to begin operations following all relevant
government approvals. The joint venture was planned to start with
production of four truck cranes - the GT8, GT10, GT20 and GT25 -
with capacities of 8, 10, 20 and 25 tons, respectively, with
other models following in due course. Within China, the cranes
produced by the venture were to be sold through Shantui's
domestic dealer network as well as Manitowoc's dealer network for
China's economic restructuring has affected governmental
investment policies in the construction industry. This in turn
has delayed necessary governmental approvals required for the
joint venture and led to the termination of the venture by
This is a blow to Manitowoc as the joint venture would have
boosted its presence in China's mobile crane market. However, the
company will evaluate its options with its current partner,
Tai'an Taishan Heavy Industry Investment Co., Ltd., with respect
to the future of the Manitowoc Dong Yue business.
Manitowoc, Wis.-based Manitowoc is one of the world's leading
innovators and manufacturers of commercial foodservice equipment.
The company is one of the premier innovators and providers of
crawler cranes, tower cranes, and mobile cranes for the heavy
construction industry. These are complemented by a number of
industry-leading product support services. Manitowoc currently
retains a Zacks Rank #3 (Hold). Other stocks in the industry that
are worth a look include
Alamo Group, Inc.
), which retain a Zacks Rank #1 (Strong Buy), and
), which carries a Zacks Rank #2 (Buy).