Zoomlion Sees ‘Drastically’ Slower Demand for Cranes, Excavators in China

Date:2011-11-21     Source:yangshujiezhuling  Text Size:

Zoomlion Heavy Industry Science & Technology Co. said slower expansion in China’s demand for cranes and excavators will carry on next year because of waning economic growth and cutbacks in railway building.

“Demand for construction machinery has shrunk drastically and growth will no doubt continue to slow next year,” Chairman and Chief Executive Officer Zhan Chunxin said in a Nov. 15 interview in Hong Kong. Meeting a 50 billion yuan ($7.9 billion) sales target for this year will also be “challenging,” he said.

China’s second-biggest maker of construction equipment fell 7 percent in Hong Kong trading as the forecast added to signs of cooling in the nation’s economy and in spending on new factories and houses. The Changsha-based company plans to offset the slowdown, and competition from Sany Heavy Industry Co. and Caterpillar Inc. (CAT) by opening plants in Japan, Brazil and India.

“There’s no doubt China’s infrastructure investment will slow in 2012,” said Banny Lam, Hong Kong-based economist at CCB International Securities Ltd., a unit of China’s second-largest lender. “The overall economy will also cool because of weaker export demand.”

Zoomlion closed at HK$8.54 in Hong Kong trading, the lowest since Oct. 4. Its declined 43 percent from the price it sold shares at in December 2010. Lonking Holdings Ltd., which also makes construction equipment, fell 2.1 percent. Sany Heavy, China’s biggest construction-equipment maker, declined 0.5 percent in Shanghai.

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