Ryan Flynn giving a speech at the factory's launch. On his right is Jiang Wei, assistant general manager for Ports, China.

By Christine Liew

Konecranes plans to expand market share in Asia by manufacturing empty container handlers and reach stackers in a new Shanghai factory.

Construction of the plant has started and production will begin there during the first quarter of 2007.

This year, Konecranes purchased a 10,000 square metre piece of land to build the dedicated factory for container handling forklifts. The site is in the Lingang heavy industry zone, in south-eastern Shanghai, near the Yangshan International Airport.

Konecranes director for north east Asia ports, Ryan Flynn, said further land was reserved for a "phase two development".

"The (phase one) facility will include a parts distribution warehouse, training centre, workshop, assembly area for reach stackers and empty container handlers, testing area for finished products and offices."

Konecranes started producing empty container handlers in its factory in Shanghai's Taopu Putuo District, at Futurity Island industrial park, in December 2005 (Forkliftaction.com News #238). The move was part of Konecranes' China forklift production strategy, Konecranes told Forkliftaction.com News in an exclusive statement.

Flynn said China was important for the company's growth.

"China is the world's largest container market and turnover is increasing at 25 per cent to 30 per cent a year.

"In 2005, the container throughput in China was 75 million and by 2010 the amount is forecast to double. Considerable port investments are being made to add capacity, which means a huge growth market for our machines," Flynn said.

He said production and support facilities close to Asian customers were necessary for increased Asian market share.

"Maintaining the quality of our Swedish forklifts is also important and that is why we are using the same drive trains and components as Europe."

The new plant would be capable of producing 200 reach stackers and empty container handlers a year. The phase two expansion planned for 2008 would double the plant's capacity. Flynn said Swedish production would continue as normal.

Sweden-based Konecranes Lifttrucks AB would supply reach stackers and empty container handlers to the European, Middle-eastern, African and American markets, and heavy duty forklifts to the global market. The Shanghai factory would supply reach stackers and empty container handlers to the Asia Pacific market.

Konecranes was investing "considerable" funds into training and developing resources in China, Flynn said.

"We have already embarked on an aggresive recruitment program to execute our strategy since 2005 when production of empty container handlers started in December at Shanghai's Taopu Putuo District.

"The staff have been selected from various locations across China although the talent pool in Shanghai is considered the most developed in China. That was a key factor in chosing Shanghai as the location for our modern forklift facility.

"Tremendous time has already been dedicated to training and development. We also have expatriates from Europe and Singapore working closely with our Chinese staff to ensure good transfer of skills," he said.

Konecranes' plant in Markaryd, southern Sweden, was extended this year. Its production capacity is now 30 per cent higher than in 2005. Konecranes established its first Shanghai factory in 2002 and a second one in 2005. It also has a rubber-tyred-gantry crane production facility in Dalian.

Konecranes Port Machinery (Shanghai) Co Ltd, a newly registered company, will be Konecranes' "main business driver in Asia" for forklifts and port machinery.

Group sales for Konecranes totalled EUR971 million (USD1.218 billion) in 2005. It employs 7,000 people in 38 countries. The crane and forklift manufacturer is listed on the Helsinki Stock Exchange.