Cargotec sells JV stake

Finnish company Cargotec and Jiangsu Rainbow Heavy Industries Co., Ltd. (RHI) have entered into an agreement where Cargotec will sell its 49% ownership in China-based JV Rainbow-Cargotec Industries Co., Ltd (RCI) to RHI.

“The change aims to simplify Cargotec’s global supply chain operations, Simplification is needed mainly because the number of complex automation projects has been growing in the past couple of years. The arrangement will also support the asset light balance sheet structure,” said Cargotec.

The joint venture was established in 2012, and since then, RCI has manufactured port and offshore cranes for Kalmar and MacGregor business areas at a factory in Taicang, China.

In addition to the sale, Cargotec will acquire certain operations and assets from RHI. According to the preliminary estimate, Cargotec will book a cost affecting comparability totalling €35m in its second quarter 2020 result as a consequence of the transaction.

After the transaction is completed, Kalmar and MacGregor will continue selling their offering to customers globally, partnering together with RHI and RCI. As part of the agreement, about 160 RCI employees are estimated to move over to Kalmar once the change in ownership structure has been completed.