Doosan Infracore Co. has started operation of its new plant in China as it seeks to recapture the top spot in the earth-moving equipment market by rolling out compact excavators.

The Korean engineering firm said Wednesday the facility in Suzhou in the eastern province of Jiangsu will churn out 9,800 eight-ton or smaller excavators annually. It has injected 72.9 billion won ($64.5 million) in the project launched in 2007.




“Given the rapid advancement of local firms, the only way of surviving competition is to produce outstanding products by reinforcing competitiveness and technology,” Park Yong-hyun, chairman of Doosan Group, said in Suzhou.

“I am confident that we will soon become the No.1 again in China.”

The Seoul-based firm’s presence in the Chinese excavator market has been faltering as fierce competitors dragged down its stake to 13.4 percent last year from 18 percent when it stayed on top in 2008. Doosan is now the runner-up chasing Japan’s Komatsu.

“With this year’s poor performance taken into account, the plant, coupled with upcoming new excavator models, will likely play a positive role in jacking up Doosan’s market share,” said Park Moo-hyun, an analyst at E-Trade Securities.

Doosan Infracore shares rose 3.3 percent to close at 18,800 won on Wednesday.

Company officials also said the new facility will help them cope with spiraling demand in China and make a way into the country’s wealthy southern region, while cutting shipping costs and securing supply chains.

Doosan runs another plant in Shandong to make large wheel loaders.

It also plans to boost the new plant’s output to 13,600 units by 2015.

Construction vehicle giants including Komatsu, U.S.-based Caterpillar and Terex have seen their revenue swell largely due to mammoth infrastructure projects and rapid industrialization in emerging markets such as China, India and Brazil.

The segment for compact excavators in the world’s fastest-growing economy has expanded by 34 percent on average over the past five years, according to Doosan, and is projected to continue growing on the back of the country’s brisk rural development.

Industry figures show that about 60 percent of global excavator demand comes from China.

By Shin Hyon-hee (heeshin@heraldcorp.com)