Yuchai To Get 100% Of Reman JV With Cat
China Yuchai International Limited (CYD) announced that its main operating subsidiary, Guangxi Yuchai Machinery Company Limited (GYMCL), has entered into an equity transfer agreement to restructure the ownership of its joint venture company, Yuchai Remanufacturing Services (Suzhou) Co., Ltd. (YRC).
The joint venture between CYD and Caterpillar (China) Investment Co., Ltd., a subsidiary of Caterpillar, was incorporated in 2010 to provide remanufacturing services for GYMCL's diesel engines and components and certain Caterpillar diesel engines and components. YRC began operations in 2011 and at the time, it was the first remanufacturing venture for both parties in China. YRC currently operates a 150,000 sq.ft. remanufacturing facility at the Suzhou Industrial Park.
Through the agreement, Caterpillar (China) Investment Co., Ltd. will transfer its entire 49% equity ownership in YRC to GYMCL, bringing GYMCL's ownership to 100% and making YRC a wholly-owned subsidiary of GYMCL. No financial terms were disclosed and the transaction is subject to approval by the Suzhou Bureau of Commerce.
With Caterpillar's expertise, YRC said it has developed quality standards and critical management processes that make it an appropriate time for GYMCL to assume control of YRC, as there are significant advantages from the integration of the remanufacturing business with GYMCL's manufacturing operations. Caterpillar has agreed to continue to provide technical support to YRC and to further enhance awareness of the advantages of remanufacturing within China. Both parties said they will continue to maintain a mutually beneficial working relationship as a result of their partnership in YRC over the past few years.
"We look forward to further developing the remanufacturing business as we believe that it provides a sustainable long-term solution to the increasing concerns over environmental pollution in China,” said Weng Ming Hoh, President of China Yuchai. “Remanufacturing is beneficial to our customers and is an additional service we can offer. We believe that our engine operations and now wholly-owned remanufacturing subsidiary will be able to generate greater synergy and create more value for GYMCL's engine users."