CHINA’S XCMG Construction Machinery Co has set up a fund management company with two major industrial groups as it widens its financial investment, and plans to increase the investment in its Brazilian subsidiary by nearly US$100 million as part of its global expansion.
China Communications Construction Co and Yanzhou Coal Mining Co also invested in the new firm that has a registered capital of 200 million yuan (US$30 million). XCMG has a 21 percent stake in the firm, with 49 percent for China Communications Construction and 30 percent for Yanzhou Coal Mining.
The new firm seeks to boost cross-industry cooperation and broaden financial investment by raising funds, selling funds and managing capital.
Zhang Qi, an analyst at Haitong Securities, said the slowing economy has forced construction companies to diversify investment.
XCMG, China’s largest construction equipment maker, also said it will invested US$99.7 million more in its manufacturing subsidiary in Brazil as part of its global strategy.
Zhang said the investment in its Brazilian unit is driven by demand for infrastructure in emerging markets.
