BEIJING, Oct. 12 -- Sweden's Volvo Construction Equipment will double its investment in a Chinese joint venture to almost 90 million U.S. dollars over the next three to four years, the world's leading construction product maker said in east China's Shandong Province Thursday.

The company pledged to double the registered capital of its Chinese joint venture in Shangdong's Linyi City from the current US$48 million in an effort designed to boost the firm's production capacity.

Part of the added investment will help Shandong Lingong Construction Machinery Co, which sold 70 percent of its stake to Volvo CE on Jan. 20, to double production capacity of wheel loaders by 2010, Volvo CE said as it celebrated the one-year anniversary of the Chinese venture.

The purchase, costing Volvo CE 327.5 million yuan (40.9 million dollars), was a significant move that is intended to support the company's strategy to increase its presence in emerging markets around the world, Keith Ellis, president of Volvo CE (China) Co Ltd, said in an earlier statement.

Market mover

Lingong's sales revenue hit two billion yuan last year, giving the company an 11 percent share of the market in China, which boasts the world's biggest wheel loader sector. Wheel loaders are earth-moving construction equipment.

The money will also be used to expand the venture's product portfolio, including production of backhoe loaders and road machines, which now make up only five percent of Lingong's overall production, over the next four years.

Lingong, which has 1,800 employees, has the capacity to produce 15,000 pieces of equipment a year, and Volvo expects the figure to jump to 30,000 over the next few years.

Volvo CE, a subsidiary of Volvo Group, sells construction products, spare parts and services in more than 125 markets around the world. It operates 166 facilities in North America, Europe and Asia.

In 2003, Volvo CE spent 24 million dollars to set up a wholly owned subsidiary in Shanghai's Jinqiao area.

(Source: Shanghai Daily)