GENEVA: Schindler has bought a stake in a Chinese lift maker as the Swiss company tries to close the gap on rivals Kone and Otis in the world’s biggest market for elevators.
Schindler formed a joint venture by buying a 25 percent stake in Volkslift Elevator (China) Co, with options to purchase remaining shares, the Swiss lift maker said yesterday. It did not give a purchase price, or say when it could buy the rest of the company.
Schindler is banking on acquisitions to help it catch up with Finland’s Kone and Otis, a unit of US-based United Technologies.
China’s fragmented lift market, with more than 400 original elevator equipment manufacturers, thousands of service companies and intense price pressure, is ripe for consolidation, companies have said.
“The new joint venture will further accelerate Schindler’s growth in this region by enhancing geographical and customer coverage in areas where Schindler has been less present to date,” the company said in a statement.
A Schindler spokeswoman declined to name what she called private shareholders who own the remaining 75 percent.
Schindler has had a limited presence in Zhejiang Province, where Volkslift is based. The Swiss company did not provide any financial details on Volkslift.
China’s 4 million existing elevators dwarf the United States’ 900,000 lifts, and two thirds of global new installations of lifts are in the country each year.
Kone is the largest player in China, with a 20 percent market share, followed by Otis.
Schindler, in fifth position behind Japan’s Hitachi and Mitsubishi, is playing catchup by building new factories and buying rivals in regions where it has been weak.
“This deal will help close the still-significant gap that Schindler has to the largest elevator and escalator makers in China,” wrote Bank Vontobel analyst Christian Arnold.
