Doosan is to pay $200 million (KRW 219.4 billion) to the UK-based private equity fund Standard Chartered Private Equity (SCPE) and DIP Holdings, a Korean investment holding company and subsidiary of Doosan Corporation, to acquire total ownership of Doosan Industrial Vehicle (DIV).
DIV has performance has significantly improved since it was set up as an affiliate company following the SCPE deal in 2011, and now has total assets amounting to $370 million (KRW 414.7 billion) and an operating profit of $32 million (KRW 36 billion) from revenues of $600 million (KRW 671.9 billion).
A new product focus and the removal of non-forklift related costs resulted in record sales and operating profits, prompting Doosan to restructure the affiliate company. The creation of the new division will allow DIV to draw on the financial power and synergies of the main parent company whilst continued growth is expected through the launching of new models, including an upgraded electric range and IC models equipped with Doosan’s own engines.
“We are very pleased with the move,” says managing director of overseas sales, Kun H Lee. “Doosan Industrial Vehicle has continued its impressive growth, with the introduction of new systems, research and development, and our growing global distributor network. We believe the investment Doosan Corporation has made is a vote of confidence in our strategy and offers us a great impetus for future success.”
The original formation of the Industrial Vehicles division gave SCPE a 49% stake in the business and effectively separated the forklift business from the construction, engine, machine tools and other operations contained within Doosan Infracore.
Under the new structure, Doosan expects to retain its forklift focus, continuing the domestic market dominance, as well as be able to develop further models for overseas expansion, particularly in emerging markets where it is experiencing high levels of growth.
“We have focused on creating mutually valuable relationships with our distributors and stakeholders. Operations are highly streamlined and the enhanced efficiencies have enabled us to introduce new products and increase profitability substantially.”
The new business group comes into operation on September 1st with no immediate changes to day to day operation.