Acquisition and merge begin to boost in the industry of construction machinery in 2008.

In Feb. 2008, Liugong acquired Bengbu Zhenchong Anli Engineering Machinery Co., Ltd. in Anhui to enter crane market; in March, Zoomlion acquired deficit Shaanxi New Huanggong Machinery Co., Ltd. and added its funds, planning to enter earthwork machinery industry.

Meanwhile, Zoomlion plans to joint with Hony Capital in bid form to acquire 100% stock share of Italian CIFA. S.p.A mainly operating concrete loading equipments, among which Zoomlion intends to acquire 60% of the whole share. As a family enterprise established in 1928, CIFA ranked No.3 of global concrete machinery supplier and gained 470 million dollars operation income in 2007. If the acquisition is done, Zoomlion will not only surpass Sany Heavy Industry, which is the third greatest enterprise in the world concrete machinery, but also can eliminate the distance between Zoomlion and world No.1 Putzmeister in Germany. Furthermore, this acquisition can also help Zoomlion to make use of the existing sales channel of CIFA to expand Zoomlion’s market share in Europe.

“Under the background that manufacturing industry is moving toward China, the listed companies can perfect the product series, complete the strategic layout of regional production and sales, enlarge sales scales and strengthen the brands force through acquisition so as to participate in international competition. Therefore, although acquisition and merge contribute little to the performance of the company in a short term, they will be favorable for enhancing the integration and concentration of construction machinery industry.” Analyst of Merchants Securities Liu Rong explained to the journalists of Money Weekly.

About Liugong:

Founded in 1958, Guangxi Liugong Machinery Co., Ltd (LiuGong) is China’s leading construction equipment manufacturer and the first stock-listed company in domestic industry. Employing more than 6000 people and with 2006 revenues of 5.18 billion RMB, including 67.3 million USD from exports, LiuGong is the world’s second largest wheel loader manufacturer for annually outputting more than 20,000 units.

About Zoomlion:

Changsha Zoomlion Heavy Industry Science & Technology Development Co., Ltd. (hereinafter referred to as "Zoomlion") was established as a hi-tech public listed company on the basis of Changsha Construction Machinery Research Institute under the Construction Ministry. Zoomlion is the only one applied research institute in mainland China that combines both the construction machinery R & D and the Industry’s technical quality assembly; it is also proudly holding a record of technology covering over 75% in the Industry. Several major institutes established under the government authority are set here, including the National Architecture & Urban Construction Quality Inspection and Testing Center, and the Ready-made Concrete Machinery Engineering Technique Research Center. Besides, there are 13 secretary offices of specialized committees under the National Construction-machinery Industry Association are also located here.