By Cho Jin-seo
Staff Reporter

YANTAI, China _ Doosan Infracore will scale up its revenue in China by almost six times to 3 trillion won by 2010 by building new factories and acquiring local machinery firms.

The construction equipment maker said it has purchased a new factory site in Suzhou near Shanghai, which will be its second manufacturing base in China after the existing complex in Yantai, Shandong Province. It also established a holding company in Beijing last November with an initial investment of $30 million to buy out local machinery and construction equipment makers.

''We are going to make China the core of our globalization plan. We are actively seeking M&A opportunities through the holding company,'' said Kang Dae-ryong, president of Doosan Infracore China Investment.

Doosan Infracore is an arm of the Doosan Group. It manufactures heavy machinery and construction equipment such as excavators, forklifts and lathes in factories in Korea, China and Belgium. The firm aims to become one of the five largest manufacturers with 10 trillion won in global sales by 2010, including 3 trillion won from sales in China.

It already claims to be the No. 1 excavator brand in China with a 20-percent share of the market. Thanks to the country's ever-growing economy, sales in China have grown from 374 billion won in 2005 to 560 billion won in 2006. This year's goal is set at 700 billion won and it is outpacing the goal so far, Kang said.

The firm admits that there is a long way to go before increasing the volume to 3 trillion won, and believes that aggressive expansion and acquisitions will be the only plausible solution. As a first step, the company bought Yantai Yuhua Machinery, a wheel loader maker, last month for only 22 million yuan (2.6 billion won). ''We have some other firms in mind. We are evaluating the sales conditions,'' Kang said.

Localization is another important factor for foreign firms to succeed, so most profits the firm makes in China are also re-invested there, he said.

''China is an enormous market. And if we want to sell more in China, we have to make more from China,'' said Jung Hai-ik, managing director at the Yantai factory. ''We want Chinese people to see our company as a Chinese firm, not a Korean one.''

Doosan currently produces some 10,000 excavators and 4,000 forklifts a year at the Yantai factory, which was established by Daewoo Heavy Machinery in 1994. Doosan took over the operation after Daewoo collapsed in the Asian financial crisis.

The company had used Doosan-Daewoo as the brand of its construction equipment in China and Europe until last year where the latter name is still widely recognized. Encouraged by the vivid growth, it took ''Daewoo'' off its nameplate and goes solely by its own name in selling construction equipment.

The old name still remains in the road that passes through the Yantai factory as ''Dayu-ru,'' which is the local pronunciation for ''Daewoo Street.'' The city government named it in 2002 in honor of the company that employees some 1,200 workers there, the firm said.

indizio@koreatimes.co.kr