China adds CIFA and NFM to European acquisitions
China adds CIFA and NFM to European acquisitions Sep 2008
Shani Wallis, Editor
28 September 2008: Chinese industrial equipment company Changsha Zoomlion has acquired Italy's formwork and concrete handling specialist CIFA. The reported €271 million ($425 million) buyout is fianced 60% by Zoomlion with the remaining 40% purchased by Goldman Sachs and Chinese equity companies Mandarin Capital Partners and Hony Capital. The group buys CIFA (Compagnia Italiana Forme Acciaio SpA) from the previous two-year owner, Italian private equity company Magenta and eight other shareholders. Zoomlion is best known for its range of industrial cranes and concrete handling equipment. The deal elevates Zoomlion to among the world's top concrete handling companies.
The acquisition supports China's intent to be a global market player and is its second major purchase of a European heavy manufacturing company. In September 2007 state-corporation NHI, Northern Heavy Industry Group, purchased a 70% share of French TBM and nuclear equipment manufacturer NFM. Niko Kleuters, previously with NFM's prior owner, WIRTH of Germany, left WIRTH to retain the remaining 30% share in NFM.
NFM Directeur Général Luc Devaux, at the ITA tunnelling congress in India last week, said the objective of NFM in China is to become the number one TBM supplier in the country with a 25% share of the its huge domestic market, while NHI is interested particularly in NFM's nuclear manufacturing expertise for China’s nuclear power construction program. “All design of TBMs will remain in NFM's French headquarters in Lyon, with principle components manufactured in the Creusot factory going to China for assembly into the shields and with other large Chinese-manufactured elements,” said Devaux, explaining that "60% of a contract is for Lyon and 35% is for China."
For NFM in France, "the goal is to generate €300 million in other markets per year. That includes TBMs outside of China, sales of other products to other heavy manufacture clients such as Airbus, in other nuclear power sales," said Devaux. The last order for an NFM TBM is for a second EPBM to Kazan in Russia for its metro construction program. The first was delivered to the project in 2003.
NFM has a staff of 250 and a turnover in 2008 of €120 million, up from the €83 million in 2007.
For CIFA, the impact of the new owners is as yet unclear. Eugenio Bertino, CIFA's Fromwork Department Director, also at the ITA tunnelling congress in Agra last week, said: "We shall wait to see how things might change but for the moment we continue with our work." CIFA has a sizable share of the international market for concrete forms and concrete handling equipment and announced opening of a new office in India at the congress to head up the three manufacturing facilities it has in the country. "All the engineering and drawings are completed in the Milan head office and supervision, as well as mechanical and hydraulic parts, are also provided from Italy," said Bertino.
As well as acquisition of international manufacturing expertise, China's international ambitions include expansion into the heavy construction industry with Chinese contracting entities involved in tunnel construction projects in Israel, the Middle East, on the Delhi Metro in India, in Singapore and developing strategies to be involved in the Crossrail project in London and making overtures to work on major tunnel projects in New York and elsewhere in the US. Its labour costs and costs for home-produced heavy manufacturing of equipment and supplies are proving hard to beat.


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