Alstom and Shanghai Electric have agreed to create Alstom-Shanghai Electric Boilers Company, a 50/50 joint company combining both partners' activities in the boiler market for coal fired power plants.
In a statement, Alstom CEO Patrick Kron said Alstom-Shanghai Electric Boilers Company would be the world leading supplier of boilers, with combined sales of about EUR2.5bn ($3.63m).
Alstom's global boiler business comprises manufacturing sites in Neumark (Germany), Chattanooga (USA), Durgapur (India) and Wuhan (China), as well as engineering centres at Stuttgart (Germany), Ashby (United Kingdom), Massy (France) and Windsor (USA). Shanghai Electric's boiler business is located in Shanghai (China).
The joint company would supply new boilers and spare parts for services. In addition to the direct sales that the joint company would achieve on the international markets, the Alstom-Shanghai Electric Boilers Company would be a supplier to Alstom and Shanghai Electric for new equipment and spare parts to their respective turnkey and service businesses.
The company would be registered in Shanghai; its operational headquarters would be in Singapore, close to its markets which are mainly concentrated in Asia.
Alstom and Shanghai Electric expect to set-up the joint company once their agreements will be finalized and after the completion of the social and regulatory processes.
Kron said: "The creation of Alstom-Shanghai Electric Boilers would be the first global, worldwide, project between Alstom and a Chinese partner. It would be a new example of the policy of strategic partnerships that the company is methodically implementing in the large developing countries like Russia, India and China.
"For Alstom, Alstom-Shanghai Electric Boilers Co would be an essential asset to develop the company's positions in China, the world's largest market, and to strengthen our leadership in the market for turnkey coal fired power plants worldwide, with a well-established reputation for power efficiency and environmental protection."
For more business news, click