Zoomlion Completes Acquisition of Germany's M-TEC

On April 2, Zoomlion announced that it had formally completed the acquisition of the German company M-TEC, and M-TEC had formally joined the Zoomlion family. With the integrated advantages resulting from this acquisition, Zoomlion will transform the Chinese dry-mixedmortar equipment field, and seize the initiative in this multi-billion dollarmarket.

German company M-TEC was foundedin 1978. It is the global leader in the field of dry-mixed mortar equipment. It produced the world's first mixing machine and mixing pump, as well as the firstdry-mixed mortar mobile silo. The company's products are already sold in 55countries and regions, and include dry-mixed mortar mixing station equipmentand dry-mixed mortar construction equipment.

Dry-mixed mortar is a flourishing industry in China, and has been called the new model of architectural coating.Indeed, this field is already mature in relatively well developed regions suchas Europe, where dry-mixed mortar accounts for over 90% of all mortar products used.

Each year, the new surface area under construction in China is around two billion square meters, meaning that the demand for construction mortar is between 350 million and 600 million tons.At present, China's domestic production capacity for dry-mixed mortar cansatisfy only 5% of this demand. Industry experts predict that both from the environmental point of view and from the point of view of creating value for customers,current trends point strongly toward future development of dry-mixed mortar.

Su Zimeng, Secretary General of the China Construction Machinery Association, said: "The center of the global dry-mixed mortar market will gradually shift toward Asia, and the Chinesedry-mixed mortar market will enter a period of rapid development. In the next three years, demand for dry-mixed mortar equipment will also increase rapidly,with annual growth in excess of 70%. In 2017, the Chinese market for dry-mixed mortar equipment may be worth billions of RMB. By acquiring M-TEC during thisperiod of rapid development in the field of dry-mixed mortar equipment,Zoomlion has seized the initiative in the market and achieved a dominantposition in the industry."

Zoomlion Vice President Sun Changjun remarked that the company has a very favorable opinion of M-TEC's business prospects following the acquisition: "This acquisition, based on estimates and evaluations of the upgrading and transformation of the industry and on future market prospects, is consistent with the company's development strategy. In terms of profit forecasts, both parties have clearly described in their business plans their intentions to very quickly recoup the investment capital and provide a new source of profit growth for the company. By acquiring M-TEC, Zoomlion has taken the initiative in this field and may achieve outstanding development."

In the field of dry-mixed mortar equipment, Zoomlion is vigorously striving to achieve the transformation from being an equipment producer to a provider of system solutions. It hopes that with individualized system services, it can provide a"one-stop shop" experience for customers and a "sit back and relax" profit model. Guo Xuehong, Zoomlion's Vice President and Deputy General Manager of its machinery company, says: "After Zoomlion's purchase of M-TEC, with cutting-edge German technical quality and the guarantees of comprehensive global industrial chains and sales service channels, it will completely restructure the Chinese market for dry-mixed mortar. Zoomlion will continue to lead the industry, and to provide the best products and value for customers in the dry-mixed mortar industry. Our goal is not only to provide a variety of equipment for our customers, but also to use M-TEC's high-end brand as a platform to bring to market system solutions including custom-tailored services, complete sets of dry-mixed mortar equipment, back end mechanized construction plans, and operations management training services."

In choosing to acquire M-TEC,Zoomlion clearly considered its counterpart's advantages in this field.According to Guo Xuehong, M-TEC is not just the only company in the world capable of research, development, and production of a variety of dry-mixed mortar station equipment and dry-mixed mortar construction equipment; it is also the only company to offer its customers a full range of value-adding services such as market analysis, sales consulting, materials analysis, and development and optimization of product formulation. Following many years of rapid development, M-TEC's subsidiaries and distributors have formed a network with global reach. Guo Xuehong says that he has full confidence in M-TEC'sdevelopment. He believes that promoting the construction of domestic dry-mixed mortar laboratories and training services, accelerating technical integrationand introduction, and demonstrating the M-TEC brand's absolute advantages invarious industry segments Zoomlion will be able to write a completely newchapter in the Asian and global dry-mixed mortar equipment business.

Analysts point out that by acquiring M-TEC, Zoomlion will reap significant benefits from M-TEC'spreeminent global brand reputation in the dry-mixed mortar equipment field.Furthermore, the complementarity of its sales channels will help Zoomlion to achieve a more rational global position and to expand its dry-mixed mortar equipment business.