- Plants for forklifts and compact excavators will be located in Suzhou.

- The company will take aim at the local market while bolstering global competitiveness.

Doosan Infracore held a May 13 groundbreaking ceremony in Suzhou, Jiangsu Province for a production complex dedicated to forklifts and compact excavators. The new facilities will be run by Doosan Infracore China Co. (a local subsidiary) and Doosan Infracore (China) Investment Co. (a holding company). The increased capacity will boost Doosan Infracore’s position in China’s forklift and excavator markets, and output will include export models, raising the company’s global competitiveness for these product lines.

Doosan Infracore will spend US$192 million to build the new complex, which will be located on a 240,000m2 site. Initial production, scheduled to begin in the first half of 2009, will total some 30,000 units per year, and annual output will be expanded to 75,000 units by 2013.

Doosan Infracore already operates a plant for mid-sized and large excavators at Yantai, and holds the top share of those product segments in China. Management is now looking to achieve the same level of success in China with forklifts and compact excavators. The drive to boost global sales will be strengthened as well. Importantly, both complexes (at Yantai and Suzhou) will have optimal production systems and operating at two locations will foster greater specialization.

Several factors have prompted the decision to set up a new operation at Suzhou. The Chinese forklift and compact excavator markets are growing fast. Moreover, Doosan Infracore will be better positioned to penetrate the South China region, and logistics costs will be lowered, raising competitiveness. China’s rapid economic growth and logistics industry development have driven demand for forklifts by some 30 percent a year. Last year, 110,000 forklifts were sold in China. The government has also been promoting urbanization and farming community development, and annual compact excavator sales have grown by an average of 60 percent per annum.

Doosan Infracore’s global strategy is to “produce top quality compact excavators at the world’s lowest cost” at the new Suzhou complex. This same approach will enable the company to make major inroads into China’s forklift and compact excavator markets.

Suzhou is China’s most advanced industrial zone, with excellent access to overland and marine shipping. It is near Shanghai, where China’s highest demand for forklifts is, as well as to South China, where most of the compact excavators are sold. Therefore, Doosan Infracrore stands to save money by producing at Suzhou. In addition, many subcontracted suppliers are locating near the Suzhou complex, which will enhance competitiveness from the standpoint of parts supply and vendor management.

According to a company spokesperson, “Suzhou’s outstanding human resources and low-cost production infrastructure will be fused with the extensive know-how we have gained from our forklift business in Korea and our experience in producing excavators in China. Once the Suzhou plant is in operation we will have a strategic platform for further penetrating China’s market for material handling and construction equipment. We also expect the Suzhou operation to improve our global competitiveness tremendously.”