Cargotec and Jiangsu Rainbow Heavy Industries Co., Ltd. (RHI) plan together to change the ownership structure of their joint venture Rainbow-Cargotec Industries Co., Ltd (RCI) in China.
The joint venture was established in 2012, and since then, RCI has manufactured port and offshore cranes for Kalmar and MacGregor business areas at the factory in Taicang, China.
The companies have entered into an agreement where Cargotec will sell its 49% ownership in RCI to the joint venture partner, and simultaneously acquire certain operations and assets from RHI.
Mikko Puolakka, chief financial officer of Cargotec, told Container News that the Helsinki-based company takes over certain personnel, intellectual property, inventories and IT systems related to engineering, project management, sales support, logistics and sourcing for the cranes which Kalmar delivers to customers in the future.
According to the preliminary estimate, Cargotec will book a cost affecting comparability totalling €35 million (US$37.8 million) in its second-quarter 2020 result as a consequence of the transaction.
Cargotec says the change aims to simplify its global supply chain operations. Simplification is needed mainly because the number of complex automation projects has been growing in the past couple of years. The arrangement will also support the asset light balance sheet structure, according to the company..
After the transaction is completed, Kalmar and MacGregor will continue selling their offering to customers globally, partnering together with RHI and RCI. As part of the agreement. About 160 RCI employees are expected to move to Kalmar once the change in ownership structure has been completed.
Editor
Antonis Karamalegkos
