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Cummins and Kanghao Form Joint Venture

by david.nunes

Cummins and Kanghao Form Joint Venture to Develop and Distribute G-Drive Engines and Coolpacs


BEIJING — Cummins Inc. (NYSE:CMI) and XiangFan Kanghao M&E Engineering Co. Ltd. (Kanghao) announced a 50:50 joint-venture partnership to jointly develop, assemble and distribute G-Drive engines from Dongfeng Cummins Engine Co. Ltd. (DCEC) and Xi’an Cummins Engine Co. (XCEC) to China-based Generator Original Equipment Manufacturers (GOEMs). The joint venture will be based in Xiangyang City of Hubei Province, central China. The new joint-venture operation is scheduled to begin operation in April 2012 with an installed capacity to handle up to 40,000 units per year, with capability to expand in the future.

The joint-venture agreement was signed in Beijing by Steve Chapman, Group Vice President of Cummins and Chairman of Cummins China, and Li ZuoYuan, Chairman of Kanghao. The joint venture will become the exclusive channel partner for DCEC and XCEC G-Drive engines in China.

Cummins recognizes that having the right strategic partnership and access to channel in China will be critical to improve its market presence and leadership in the power generation industry globally. China is a key player in the industry, with more than 30 percent of global diesel and natural gas generator sets manufactured in the country. In addition, China’s growing economy consumes more than 10 percent of generator sets manufactured globally.

The joint venture brings together two companies with strong complementary businesses to offer a compelling value proposition to generator manufacturers in China: Cummins, with its legendary customer focus, technological leadership and product portfolio, and Kanghao, with its strong components business and G-Drive channel presence in China. The partnership will also benefit our key Cummins joint-venture partners in China – DCEC and XCEC – by expanding the market reach and channel for their G-Drive engines globally.

“The joint venture aims at integrating the strong power generation business of Cummins and the unique channel resources and key component supply of Kanghao,” said Leo Zhao, General Manager of Cummins Power Generation China. “The primary focus of this new partnership is to further expand the G-Drive business of Cummins’ joint ventures in China, including Dongfeng Cummins and Xi’an Cummins. By providing the best products, service and brand recognition to China’s power generation OEMs, the new joint venture will achieve joint success with partners and customers.”

“We are thrilled to have this opportunity to significantly expand our cooperation with Cummins,” said Fan Xiao, Kanghao Executive Vice President. “Kanghao is a strong player in China’s power generation market, while Cummins is a global power leader. Our long-term partnership with Cummins has already laid a solid foundation for this new joint venture. We are confident that the enhanced cooperation between the two powerhouses will further leverage our complementary strength to winning the market over.”

About Cummins

Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins employs approximately 40,000 people worldwide and serves customers in approximately 190 countries and territories through a network of more than 600 company-owned and independent distributor locations and approximately 6,000 dealer locations. Cummins earned $1.0 billion on sales of $13.2 billion in 2010. 

About Kanghao

XiangFan Kanghao M&E Engineering Co. Ltd. is a subsidiary of the Xiangyang, China-based CYDG-Kanghao Corp. XiangFan Kanghao is a leading manufacturer of electronic governor controls, actuators and cooling systems in China with its Beworld- and Herocity-branded products. CYDG-Kanghao’s 2011 revenue is expected to well exceed 8 billion RMB ($1.2 billion) and it is also the largest component supplier for joint ventures Dongfeng Cummins Engine Co. Ltd. (DCEC) and Chongqing Cummins Engine Co. (CCEC).

For more information, contact Ananth Parameswaran, Director – Global Product Planning and Marketing, Cummins Power Generation, 1400 73rd Ave. NE, Minneapolis, MN 55432. Phone: +1 763-528-7184. Or visit www.cumminspower.com.


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