Mitsubishi Heavy Industries Ltd (MHI) and Nippon Yusoki Co (Nichiyu) are planning a joint forklift production in China.

The Nikkei Report says demand for forklifts in China is surging on the back of a construction boom and Nichiyu's Shanghai factory, which has an annual capacity of about 3,000 units, is under pressure to cope with the demand.

According to the report, Nichiyu's production of about 200 to 300 units a year will soon be moved to MHI's plant in Dalian.

MHI spokesman Hideo Ikuno tells Forkliftaction.com News that no official decision has been made yet regarding the joint effort but that the Chinese plant will double its staff progressively when production increases. MHI started producing forklifts in its new Dalian plant in 2009 with plans to increase production models in the future (Forkliftaction.com News #440).

Dalian currently produces four models of small-sized, 2-3.5 ton engine forklifts. It employs 150 people.

The two companies have capital and sales promotion tie-ups. In April 2009, MHI and Nichiyu established the joint venture company Nichiyu MHI Forklift CO Ltd to consolidate their domestic marketing activities. MHI owns 33.4% of the company while Nichiyu holds 66.6%. Both conduct overseas marketing activities independently.

MHI is the largest shareholder of Nichiyu, owning a 20% stake in the latter's equity.