Chinese firms Shacman and Avic now launch joint venture

Aviation Industry Corporation of China (Avic) is merging its construction and transportation businesses with that of compatriot Shaanxi Automobile Group (Shacman).

Avic announced in Nairobi over the weekend it had entered into a joint venture with the heavy duty manufacturer Shacman to form Avic-Shacman.
Avic, which is a major player in the local construction industry, also has a vehicle distribution arm that sells Chinese brands Shantui and JAC.

The two plan to open a service centre, introduce more brands of heavy duty vehicles and eventually set up an assembly plant. “What we hope to do is actually quite simple: bring the industrialisation experience of China and add to it local culture, in order to integrate deeply into Kenya. At first, it may not be feasible to transport the entirety of the manufacturing process, but we can begin by developing some local component parts manufacturing capacity.

Next step

Then, the next step would be to engage in the complete product assembly processes locally,” said Avic Beijing manager Chen Zhe in a statement.
Both firms have been operating locally but separately for close to a decade, serving both the private and public sectors.

Shacman, which entered the Kenyan market in 2006, counts the Ministry of Defence as one of its customers, having sold over 400 trucks to the disciplined forces.

Avic on its part has been active in Kenya’s real estate industry having announced projects in the pipeline that worth over Sh30 billion.

The Chinese conglomerate is putting up its African headquarters in the Westlands area of Nairobi through a mixed development.

The development will include a five-star hotel, apartment and office blocks worth Sh20 billion. Avic Park, a Sh4 billion apartment complex in Kileleshwa is also coming up. In April Avic announced it had bought a 38.9 per cent stake in Centum’s Two Rivers for Sh64 billion.