Chinese manufacturer LiuGong Machinery has finalised its agreement to acquire Polish firm HSW (Huta Stalowa Wola) and its distribution subsidiary, Dressta. The agreement was signed by executives from both companies in Warsaw.
Chinese manufacturer 269 LiuGong Machinery has finalised its agreement to acquire Polish firm HSW (4123 Huta Stalowa Wola) and its distribution subsidiary, 3420 Dressta. The agreement was signed by executives from both companies in Warsaw. David Beatenbough, currently vice president of Research and Development for LiuGong, has been named chairman of the board of the new entity, LiuGong Machinery (Poland). The transaction is LiuGong’s first outright acquisition outside of its domestic market.
HSW is a well know manufacturer of bulldozers and other crawler machines. It is one of only seven manufacturers worldwide producing a complete line of bulldozers, from 55-388kW. The Polish government was the primary owner of HSW and agreed in principal to sell to LiuGong earlier this year with the signing of a preliminary enterprise acquisition agreement in Beijing. After announcing its intent to acquire HSW last March, negotiations for the agreement continued during the summer and fall, as LiuGong reached agreement regarding wages and job security with the Polish Workers Union and completed the commercial terms of the transaction with HSW. “Our gaining and retaining the technical knowledge and skills of the HSW employees was important to us in this agreement,” said Beatenbough. “It is still important for us to remain competitive in our markets, and this agreement lets us do that.”
LiuGong’s acquisition of HSW represents a smart strategic step for the company, which has a publically stated goal of becoming a top 10 construction equipment manufacturer by 2015. In the transaction, LiuGong obtains core technologies that will help it advance some of its product designs; supplements LiuGong’s already expansive product lines; provides a manufacturing and logistic footprint in Europe; and expands LiuGong’s penetration into markets and products segments. LiuGong already offers a full line of high quality machines to world markets. LiuGong has a wide range, including wheeled loaders, bulldozers, skid steers, forklifts, motor graders, excavators, rollers, drilling machines, truck mounted and crawler cranes, pavers, cold planners, concrete equipment and mining dump trucks.
The company, ranked as the highest volume manufacturer of wheeled loader manufacturer in the world, is also among the world’s fastest growing CE firms. The company sold 75,000 machines in 2011 and has posted an average of 40% annual revenue growth for the past six years running in overseas markets. It is ranked among the world’s top 20 machine manufacturers. As a leading exporter of machines from China, LiuGong has one of the largest global dealer networks of any of its Chinese competitors. The network consists of nearly 280 dealers in more than 95 countries, and is backed by nine subsidiary offices and 10 parts depots that deliver items within 48 hours. LiuGong runs 22 manufacturing plants in China, and one in India that adhere to Six Sigma quality methods. HSW will bring that count to 24. LiuGong supports a world class R&D function, and has a team of more than 13,000 employees, including over 750 engineers, standing behind every machine it makes. The company’s full contact relationship with its customers and its markets lets LiuGong share know-how for today’s projects while anticipating needs for tomorrow’s jobs.
HSW was established in 1937 and is well known for manufacturing crawler dozers at its plant in the Podkarpackie province in southwestern Poland. HSW also produces wheel loaders, loggers, pipe layers, conveyer belt shifters, motor graders and machines customized for landfill applications, also for global markets. Beatenbough said, “We will acquire proven technology within the bulldozer segment, as we will now own all the technology and designs, including undercarriages and driveline components. HSW machines have a long and respected design history reaching back to International Harvester, which was an early developer for the track-type undercarriages that presaged construction equipment as we know it today. “ He said LiuGong will benefit from HSW’s experience with large model machines. Beatenbough noted LiuGong will also benefit from HSW’s plant location in central Europe, closer to its European customers, without undertaking a long, expensive construction project.
With the transaction now complete, LiuGong will move rapidly to integrate processes and production. A talent exchange will bring Chinese engineers to Poland, and send Polish engineers to China for training. The first fast-track project will be an investment into production line equipment and re-tooling at the Podkarpackie plant, enabling it to produce LiuGong excavators and wheeled loaders as quickly as possible. Beatenbough said the plant is expected to increase its overall production capacity, which in turn, will increase its purchasing requirements for raw materials. Work on this begins immediately. LiuGong will leverage the combined distribution network to bring the expanded product line to dealers – HSW products to LiuGong dealers, and LiuGong products to HSW/Dressta dealers. Relative to brand names, Beatenbough said, for the near term all three brands will be retained in certain markets.
HSW is a well know manufacturer of bulldozers and other crawler machines. It is one of only seven manufacturers worldwide producing a complete line of bulldozers, from 55-388kW. The Polish government was the primary owner of HSW and agreed in principal to sell to LiuGong earlier this year with the signing of a preliminary enterprise acquisition agreement in Beijing. After announcing its intent to acquire HSW last March, negotiations for the agreement continued during the summer and fall, as LiuGong reached agreement regarding wages and job security with the Polish Workers Union and completed the commercial terms of the transaction with HSW. “Our gaining and retaining the technical knowledge and skills of the HSW employees was important to us in this agreement,” said Beatenbough. “It is still important for us to remain competitive in our markets, and this agreement lets us do that.”
LiuGong’s acquisition of HSW represents a smart strategic step for the company, which has a publically stated goal of becoming a top 10 construction equipment manufacturer by 2015. In the transaction, LiuGong obtains core technologies that will help it advance some of its product designs; supplements LiuGong’s already expansive product lines; provides a manufacturing and logistic footprint in Europe; and expands LiuGong’s penetration into markets and products segments. LiuGong already offers a full line of high quality machines to world markets. LiuGong has a wide range, including wheeled loaders, bulldozers, skid steers, forklifts, motor graders, excavators, rollers, drilling machines, truck mounted and crawler cranes, pavers, cold planners, concrete equipment and mining dump trucks.
The company, ranked as the highest volume manufacturer of wheeled loader manufacturer in the world, is also among the world’s fastest growing CE firms. The company sold 75,000 machines in 2011 and has posted an average of 40% annual revenue growth for the past six years running in overseas markets. It is ranked among the world’s top 20 machine manufacturers. As a leading exporter of machines from China, LiuGong has one of the largest global dealer networks of any of its Chinese competitors. The network consists of nearly 280 dealers in more than 95 countries, and is backed by nine subsidiary offices and 10 parts depots that deliver items within 48 hours. LiuGong runs 22 manufacturing plants in China, and one in India that adhere to Six Sigma quality methods. HSW will bring that count to 24. LiuGong supports a world class R&D function, and has a team of more than 13,000 employees, including over 750 engineers, standing behind every machine it makes. The company’s full contact relationship with its customers and its markets lets LiuGong share know-how for today’s projects while anticipating needs for tomorrow’s jobs.
HSW was established in 1937 and is well known for manufacturing crawler dozers at its plant in the Podkarpackie province in southwestern Poland. HSW also produces wheel loaders, loggers, pipe layers, conveyer belt shifters, motor graders and machines customized for landfill applications, also for global markets. Beatenbough said, “We will acquire proven technology within the bulldozer segment, as we will now own all the technology and designs, including undercarriages and driveline components. HSW machines have a long and respected design history reaching back to International Harvester, which was an early developer for the track-type undercarriages that presaged construction equipment as we know it today. “ He said LiuGong will benefit from HSW’s experience with large model machines. Beatenbough noted LiuGong will also benefit from HSW’s plant location in central Europe, closer to its European customers, without undertaking a long, expensive construction project.
With the transaction now complete, LiuGong will move rapidly to integrate processes and production. A talent exchange will bring Chinese engineers to Poland, and send Polish engineers to China for training. The first fast-track project will be an investment into production line equipment and re-tooling at the Podkarpackie plant, enabling it to produce LiuGong excavators and wheeled loaders as quickly as possible. Beatenbough said the plant is expected to increase its overall production capacity, which in turn, will increase its purchasing requirements for raw materials. Work on this begins immediately. LiuGong will leverage the combined distribution network to bring the expanded product line to dealers – HSW products to LiuGong dealers, and LiuGong products to HSW/Dressta dealers. Relative to brand names, Beatenbough said, for the near term all three brands will be retained in certain markets.
