JV ownership structure changed

Cargotec and Jiangsu Rainbow Heavy Industries (RHI) plan to change the ownership structure of their joint venture, Rainbow-Cargotec Industries Co., Ltd (RCI) in China. The joint venture was established in 2012, and since then, RCI has successfully manufactured port and offshore cranes for Kalmar and MacGregor business areas at the factory in Taicang, China.

The companies have entered into an agreement where Cargotec will sell its 49% ownership in RCI to the joint venture partner, and simultaneously acquire certain operations and assets from RHI. According to the preliminary estimate, Cargotec will book a cost affecting comparability totalling EUR35 million (USD37.8 million) in its second quarter 2020 result as a consequence of the transaction.

According to a statement to Nasdaq, 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.

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 expected to move over to Kalmar once the change in ownership structure has been completed.