Cummins Inc and Guangxi LiuGong Machinery Co Ltd have formed a joint-venture partnership to manufacture engines at a new facility that will be built in Liuzhou City in Guangxi province in southern China.

The new joint venture, named Guangxi Cummins Industrial Power Co Ltd, will start producing engines in 2013. Production is expected to reach 50,000 units annually, with volumes expected to grow in the future.

The engines that will be produced in Liuzhou City will be based on the Cummins MidRange engine family that meet Tier 2 and Tier 3 emissions regulations. The engines will meet the demand by LiuGong and other construction equipment manufacturers in China.

"The joint venture with LiuGong will create the foundation for both partners to
expand significantly in the construction equipment market in China, the largest in the world, and where robust demand will continue to drive growth in the years ahead," says Tom Linebarger, CEO of Cummins.

Cummins currently supplies MidRange engines to LiuGong for both its domestic market in China and for its global operations. The joint-venture operation in Liuzhou City will focus on introducing engines designed for construction equipment in China.

"The joint venture can be seen as a natural progression of our successful 10-year relationship and we are delighted to become even stronger partners," says Zeng Guang'an, president of LiuGong.

Guangxi Cummins Industrial Power will complement existing Cummins manufacturing capabilities in China that have focused mainly on the automotive market.

"By combining our equipment expertise with Cummins' world class engine capability, we know we have the right formula in place for our new Guangxi Cummins Industrial Power joint venture to succeed. Initial operations will begin as early as 2012 with engine kit assembly, providing a useful lead-in to full production engines in 2013," Zeng says.

LiuGong chairman Wang Xiaohua and Cummins group vice president Steve Chairman signed the joint-venture agreement in Liuzhou City this month.

LiuGong has a full line of machines including forklifts, wheel loaders, excavators, bulldozers, rollers, graders, pavers, backhoes, skid steers, truck-mounted and crawler cranes, and mining trucks. It has 17 manufacturing facilities in China, India and other regions and a sales and service network in over 80 countries.

Cummins Inc, headquartered in Indiana, USA, is a leading engine manufacturer that employs about 40,000 people worldwide and serves customers globally through a large distribution network. Cummins earned USD1 billion on sales of USD13.2 billion in 2010.