Finnish crane maker Konecranes will capture 50 to 55 percent of its global sales in Asia in three to four years, up from 30 percent now, helped by robust demand in China, a senior executive said on Wednesday.
Konecranes' sales in China are expected to grow 30 percent this year, from 500 million yuan ($66.58 million) last year, and will maintain a 20 to 30 percent growth rate over the next decade, its Asia Pacific managing director Michael Ho said.
The market here is so big. I think such growth momentum would at least continue for the next 10 years, Ho told Reuters on the sidelines of an industry event.
While growth in mature markets in North America and Europe is tapering off, Asia, and China in particular, has been a bright spot, attracting industry heavyweights such as Konecranes and rival Demag Cranes AG.
Konecranes built its first manufacturing plant in China in late 2001 and the country now generates 70 percent of the company's sales in Asia, including Japan, against 50 percent three years ago.
To cash in on robust demand in the world's fourth-largest economy, Konecranes already operates four manufacturing plants and three joint ventures in China, and plans to add a new facility and a new venture in the country this year.
It is also considering taking over one or two local firms next year and is currently in talks with potential targets, Ho added. He declined to name the companies.
If a deal goes ahead, it would mark Konecranes' first acquisition in China, where local rivals such as major Chinese container crane and port equipment maker Zhenhua Port Machinery are also ramping up capacity amid a global shipping boom.
The Finnish firm, whose cranes are used by port operators, steel mills, power generators and others, initially relied heavily on multinationals and local joint ventures to drive its China sales, said Ho, who came to China in 2001.
Now it has expanded its local clientele to include China's top steel mill, Baosteel, its largest lathe maker Shenyang Machine Tool (Group) Co and Aluminium Corporation of China Ltd, the world's second-largest aluminium maker.
Today half of our China business is local, Ho said.
In addition to supplying the local market, Konecranes also ships some Chinese-made products overseas, including to Europe and the Americas.
Exports from China will continue for the next several years as lower labour costs will easily offset the impact of a rising Chinese currency, he added.
The yuan has appreciated a modest 8 percent since it was revalued and freed from a dollar peg in July 2005, and Beijing has insisted the currency's rise will be gradual despite clamouring by China's major trading partners for faster appreciation.