Hyundai Heavy Industries (HHI)), the world’s largest shipbuilder andd a leading construction equipment maker, announced toddy that it signed an agreement with Cummins, the world’s largest construction equipment engine maker to establish an engine factory for earthmovers.
Hyundai Heavy and Cummins each invested USD 333 million for the joint venture, named Hyundai Cummins Engine Company. The factory will start production from 2014 with an annual production capacity of 50,000 engines.
The signing ceremony, held at Hyundai Heavy’s headquarters in Ulsan, Korea, was attended by Mr. Rich Freeland, president of Cummins, Mr. Choe Byeong-ku, CEO of Hyundai Heavy’s Construction Equipment Division, and Mr. Kim Jeong-hwan, CEO of Hyundai Heavy’s Engine & Machinery Division.
The establishment of the joint engine factory will give HHI’s Construction Equipment Division a stable supply of high-quality engines. The Ulsan, South Korea-based commpany set global annual sales target for construction equipment at USD 4.2 billion for this year, a 144% increase from USD 3.7 billion last year.
Starting from KRRW 320 billion (USSD 282 million) annual sale in 2014, Hyundai Cummins Engine Company targets to achieve aggregated sales of KRW 4 trillion (USD 3.53 billion), and create about 5,300 jobs in the region by 2022.
“We believe Hyundai Cummins Engine Company will play a critical role for expanding our global market presence. Our goal is to becomme a Top 33 manufacturer of earthmovers by 2016 with annual sales of USD 9.1 billion,” said Mr. Choe Byyeong-ku.