KION, Europe’s leading manufacturer of forklifts and other materials handling vehicles, is now focusing on an even larger marketplace: China.
Company CEO Gordon Riske said that although the German company has been present in Asia for nearly two decades, it is now poised to aggressively pursue the materials handling market in China, the world’s second largest economy.
“By setting up KION South Asia, our new entity in Singapore, the KION group has put in place the organizational structure that will enable it to unlock the full potential of the market in south and southeast Asia,” Riske said in a news release.
“Our many years of experience in China are also benefiting us in other parts of Asia,” Riske said. “Our goal is to carry on our market share in Asia and to acquire additional customers across the region. To this end, we are constantly extending the local sales and service networks of the KION Group’s global brands.”
Strategy Follows Big Asian Investment
As part of its Asian strategy, in late 2012 KION teamed with Weichai Power, a state-owned power company based in Weifang, Shandong, China, which specializes in manufacturing diesel engines. Weichai Power purchased a 25% stake, or about $1 billion, in KION last year.
Weichai Power also invested another $371 million in Linde Hydraulics, a KION subsidiary. Toghether, it was the largest investment by China in an European company in history. Weichai then boosted its stake in KION To 30% in June, when the Wiesbaden-based forklift manufacturer issued its first Initial Product Offering (IPO).
Sales Increased 8% Through September
Since September, KION has sold 12,577 forklifts in China, an all-time record and up 8% from the previous year. Sales revenues topped $325 million. The company currently employs about 3,200 workers in Asia — about 1,200 in manufacturing and another 1,500 in sales and service.
KION is serious about tackling the enormous Asian forklift market, said Riske. It currently has two research and development centers, two manufacturing facilities, and more than 100 sales and service storefronts in China. Through its Linde brand, KION also is the largest international manufacturer there in the premium segment and the market leader for electric forklifts and warehouse trucks.
Plans to Expand Asian Presence
KION currently accounts for about 7% of the entire Chinese market for industrial trucks, but it doesn’t plan on stopping there.
“Our strategic alliance is strengthening both partners,” Riske said of China’s investment in KION. “It offers us the opportunity to break into new areas of business and to leverage synergies for our mutual benefit.”
KION was one of several German companies — including giant chemical manufacturer Evonik Industries — that opted to go public in June in the wake of the resolution of the eurozone sovereign debt crisis, according to the Financial Times.
As a result of Weichai’s investment in KION, the company was able to pay off much of its debt and its IPO valued the company at nearly $4 billion.