Construction News

Thu March 28 2024

Related Information

LiuGong makes its move with Polish acquisition

25 Mar 11 LiuGong, one of China’s largest construction equipment manufacturers, is taking its first step into European production with the acquisition of Huta Stalowa Wola (HSW) of Poland.

LiuGong 88III wheel loader
LiuGong 88III wheel loader

The deal, announced at the Conexpo show in Las Vegas this week, includes HSW’s distribution subsidiary, Dressta, but not HSW’s military manufacturing business.

LiuGong is one of the largest wheel loader manufacturersin the world with a 15% global market share and is ranked as the15thlargest construction equipment manufacturer in the world in 2010.  LiuGonghas 12 product lines, including wheel loaders, bulldozers, backhoes, skid steers, forklifts, graders, excavators, rollers, truck mounted and crawler cranes, and pavers. Last year, LiuGong produced and sold more than 56,500 machines worldwide with production from16 manufacturing facilitiesinside and outside of China.

Established in 1937, HSW produces crawler dozers at its plant in the Podkarpackie province in southwestern Poland. HSW also makes wheel loaders, sideboom pipe layers and machines customised for landfill applicationsand logging operations. 

Dressta is the exclusive marketing arm of HSW equipment with offices around the world.  Machines are sold under the HSW brand in parts of Eastern Europe, but are sold under the Dressta brand throughout the rest of the world.

HSW stock is primarily government-held, with Poland’s State Treasury as the largest stockholder.

LiuGong vice chairman and president Zeng Guang’an described the acquisition as “another bold step in LiuGong’s global growth strategy”.

He said: “We are pleased to partner in this agreement with HSW as this provides an excellent opportunity for LiuGong to acquire manufacturing capacity in Europe, as well as technology that will supplement our machine lines.

“This acquisition helps us continue success with our five year strategy to become a top 10 construction equipment manufacturer.” 

With HSW Dressta, LiuGong gets a strong bulldozer line complimentary to LiuGong’s product mix, said LiuGong R&D vice president David Beatenbough.

“With HSW Dressta, LiuGong acquires proven technology within the bulldozer segment,” said Mr Beatenbough, adding that LiuGong will acquire all the patents for technology and designs,for complete machines as well as component technology, including undercarriages and driveline components such as axles,transmissions and torque converters.

Related Information

 “HSW is one of only seven manufacturers in the world with a full line of bulldozers. And the machines have a long design history that reaches back to International Harvester, which was an early developer of track-type undercarriages that led to true construction machinery as we know it today. LiuGong will benefit from HSW’s world class engineering expertise and we’ll gain access to some large, high horsepower machines and advanced driveline component technology,” Mr Beatenbough added.

“We’ll quickly be sending teams back and forth between Poland and China so we’ll be able to share innovations. We will continue production in Europe of HSW’s current product range, and supplement this with production in Poland of some of LiuGong’s core models to serve the European markets,” he added.

LiuGong also expects to benefit from the reach of HSW Dressta’s distributor and dealer network.

Financial arrangements for the acquisition will be disclosed when the final agreement is signed, which is expected by the end of the June. 

LiuGong has already has one overseas factory, having opened a wheel loader factory in India two years ago.

LiuGong made profits of US$280m in 2010 on total sales of $2.32bn. Profits were up 80% on 2009 and sales revenue was up 51%.

In the past five years, LiuGong has seen nearly 30%average annual revenue growth as total company revenues have steadily climbed from $700m in 2006.

LiuGong sold 56,424 machine units in 2010, up 45%from the 38,920 sold units in 2009. Of these, 50,894 went to the Chinese domestic market and 5,530 units were sold overseas. Total 2010 production was 62,000 machines. In 2006 it sold 22,194 units.

LiuGong is headquartered in Liuzhou, China and is publicly traded on the Shenzhen Stock Exchange. It has a rapidly-growing, worldwide network of 117 dealers across six continents in more than 77 countries with more than 883 outlets. It also has nine subsidiary locations around the globe.

Got a story? Email news@theconstructionindex.co.uk

MPU
MPU

Click here to view latest construction news »