Yuchai Machinery Co., Ltd. (Yuchai Machinery) has recently concluded an agreement with Caterpillar (China) Investment Co., Ltd. Yuchai Machinery will buy out Caterpillar's 49% stake in the joint venture--Yuchai Remanufacturing Services (Suzhou) Co., Ltd. (YRC) to wholly own the joint venture.
Under the agreement, YRC will be Yuchai Machinery's wholly-owned subsidiary. Sources said relevant formalities for industrial and commercial changes have been gone through with the Suzhou Bureau of Commerce.
As a joint venture of Yuchai Machinery and Caterpillar founded in April 2010, YRC went into operation in 2011 and primarily provides remanufacturing services for diesel engines and parts manufactured by Caterpillar. After years' operation, YRC has accumulated rich technologies and management experience, thus improving its operation level year by year. In the first half of 2014, YRC operated in good conditions and fulfilled 46 percent of its annual target.
Yuchai signed a technical agreement with Caterpillar after closing related deals. Caterpillar undertook to continue providing technical support to YRC. In the future, Yuchai Machinery will adjust YRC's leading organization to resolve the problem of organizational vacancies caused by equity change.
Referring to YRC's future development, Zhu Jihui, vice general manager of YRC, said, with the change in the shareholder cooperation mode, YRC's management right will be returned to the parent company--Yuchai Machinery and be fully incorporated into the overall plan of Yuchai Machinery, and YRC will be subject to leadership and management by Yuchai Machinery in enterprise management, product planning, repair technology R & D, marketing, quality control and after-sales service. Based on the parent company's advantage in comprehensive strength, YRC will practically improve its business quality and management level, and reduce material cost to develop steadily and healthily, he added.
According to sources, remanufacturing is a high-end way of recycling. With repair technologies, in accordance with perfect manufacturing standards, it converts parts whose useful lives have expired to make them match new products. Engine remanufacturing is a forerunning model sector of the internal combustion engine industry which responds to the national call of promoting energy conservation and emission reduction, changing and adjusting the structure and mode of economic development, and taking the road of sustainable development and recycling economy. Yuchai is the first enterprise to have established a subsidiary specialized in remanufacturing among domestic diesel engine manufacturers.