Sandvik, Chinese Mining Equipment Supplier Form Joint Venture

   DOW JONES NEWSWIRES 
 

Swedish engineering group Sandvik AB (SAND.SK) said Friday its Sandvik Mining and Construction unit and Shandong Energy Machinery Co. in Xintai, Shandong Province, China, have signed an agreement to form a 50/50 owned joint venture for the production and sales of coal mining equipment.

 
   MAIN FACTS: 

-The joint venture is expected to be established within 6 months, following customary regulatory approvals.

-It is planned to be operational by the end of 2011 and will be fully consolidated in the Sandvik reporting.

-One of the business focuses of Shandong Energy Machinery is to design and manufacture equipment for the Chinese underground coal mining market. It is a subsidiary of Xinwen Mining group.

-Shandong Energy Macinery has approximately 4400 employees.

-The joint venture will focus on sourcing, assembly, sales and service of roadheaders for the large Chinese coal mining market.

-Sandvik will contribute with the product know-how and technology while Shandong Energy Machinery will contribute with local sourcing skills and customer application knowledge.

-The products are premium Sandvik roadheaders and will be sold under the Sandvik brand.

-While the initial focus will be to supply roadheaders to Shandong Energy Machinery's mother company, Xinwen Mining group, the goal of the JV is to become the leading premium roadheader supplier to the Chinese coal mining market.

-At 0715 GMT shares traded 0.3% lower at SEK125.30.

-By Dominic Chopping, Dow Jones Newswires; [phone]; [e-mail]