Konecranes has entered into a strategic alliance with Japanese hoist, crane and material handling equipment company Kito Corporation to boost each company's growth in the global market.

"The alliance will enable both companies to expand their product offering as well as to improve competitiveness and customer service," says Pekka Lundmark, CEO of Konecranes.

As part of the agreement, Konecranes will purchase 22% of Kito's share capital from international private equity firm The Carlyle Group. The value of the stake amounts to about JPY3.3 billion (USD35.3 million). Konecranes says it will finance the purchase with its existing cash reserves.

Both companies will leverage the other's global market potential and complement each other. Konecranes will sell Kito manual products while Kito will sell Konecanes' wire rope hoists. They will also examine the possibilities of co-operating in distribution and licence manufacturing of other products as well as in procurement.

Konecranes and Kito have agreed to negotiate definitive distribution and licence agreements by the end of June 2010.

Konecranes will transfer the hoist distribution business of Konecranes' Japanese joint venture MHS Konecranes Co Ltd to Kito, to create a strong player in the Japanese hoist market. Both companies will retain their own identity and independence under the alliance.

Kito, established in 1932, is a Japanese supplier of hoists, cranes and materials handling equipment. It employs about 1,500 people and its shares are listed on the Tokyo Stock Exchange. It has subsidiaries and sales agents in over 50 countries, and is focused on the Japanese, North American and Chinese markets. Kito's manufacturing sites are in Japan, China and the Philippines.

For the year ended 31 March 2009, Kito's net sales totaled JPY32.605 billion (EUR227 million) while operating profit amounted to JPY2.366 billion (EUR16.5 million).