2020-08-17

KION Group begins work on new China plant

KION GROUP AG is expanding its business in China and has begun the construction of an additional production plant for counterbalance trucks in Jinan, Shandong Province. With the project, the company anticipates extending its product portfolio for industrial trucks in one of the world’s most important material handling markets at a cost of approximately EUR 100 million. KION Group expects to create over 800 jobs by 2025 with its new facility in eastern China.

“China has quickly recovered from the coronavirus and as one of the fastest-growing markets globally, it plays a key role in our strategy,” said Gordon Riske, Chief Executive Officer at KION GROUP AG, who took part in the groundbreaking ceremony in Jinan via video link. He noted that according to the World Industrial Truck Statistic (WITS), the Chinese economy accounts for roughly 30 percent of the global industrial truck market and that – based on KION’s Group estimates – this share is set to increase.

We want to harness the potential of this important market even more effectively and expand our position as a leading supplier of intralogistics equipment in China.

Gordon Riske, KION Group CEO

Unlock growth opportunities and capitalize on the increasing trend in electric vehicles

The Group aims to significantly extend its product portfolio through the new plant to unlock growth opportunities in the value segment and capitalize even more on the greater electrification trend of industrial trucks in China. The Group has established a new company for this purpose, where KION has a 95-percent stake with Weichai Power, the largest investor in the KION Group, having the remaining 5 percent. The equity investment by Weichai Power, which is also based in Shandong Province and manufactures powertrain systems, commercial vehicles and vehicle electronics, ensures that the KION Group has a strong local presence in the region.

“This historic moment once again underscores our close and collaborative work relationship between KION Group and Weichai Power,” noted Xuguang Tan, the chairman and CEO at Weichai Power, at the event. “We began our productive and highly successful partnership in 2012 and the new Jinan plant is expected to be a further milestone in this growth strategy.”

KION's new plant in Jinan, China

“We believe that our highly automated plant, the new KION Value Competence Center adjacent to it and the expansion of our sales and service network creates the ideal conditions to better serve our Linde Material Handling and Baoli customers in the fast-moving Chinese market and to respond more effectively to global demand in the value segment,” added CP Quek, member of the Executive Board of KION GROUP AG and Chief Asia Pacific & Americas Officer.

The new facility is planned to come on stream in 2022. On a site that covers almost 223,000m² – equivalent to more than 31 soccer fields – the Group is also building an innovative research and development center, training center and administrative offices next to an advanced production plant where industrial trucks will be manufactured for KION’s Linde Material Handling and Baoli brands.

The KION Group in China

The various KION Group brands have been on the Chinese market for many years, making KION both the country’s leading foreign provider of industrial trucks and warehouse technology in terms of revenue, as well as the number three within China. Linde Material Handling began production in China as part of a joint venture in Xiamen, Fujian Province, over 25 years ago, before acquiring all company shares in 1999. KION launched a second warehouse truck facility, producing mainly Linde trucks, near its Xiamen site in Spring 2020. Baoli has been part of the KION Group since 2009 and manufactures industrial trucks at its Jingjiang site, in Jiangsu Province. Dematic, a global leader in intelligent supply chain, software and automation solutions, has been producing systems for the Chinese market in Suzhou, Jiangsu Province, since 2006. The KION Group currently employs more than 4,000 individuals in China.

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