joy ceo says "we expect the second half of 2013 to see strong orders out of china"
Joy CEO Says China Coal Miner Demand to Gain as Power Use Rises
By Shruti Date Singh - Mar 22, 2013 12:01 PM CT
Joy Global Inc. (JOY), the world’s second-largest maker of mining equipment, expects demand from coal producers in China to gain this year as the economy picks up and energy use increases.
“We have active discussions going on with customers,” Michael Sutherlin, chief executive officer of Milwaukee-based Joy Global, said in a telephone interview today. “We expect in the second half of 2013 to see strong orders out of China. We expect Chinese orders to be up year over year.”
Joy Global has declined 22 percent in the past year as slower economic growth from the U.S. and China, the world’s largest consumer and producer of coal, prompted miners to curb capital spending. Two-thirds of Joy Global’s revenue comes from coal producers globally and about 18 percent from sales to China’s mining industry, Sutherlin said.
Long-term expansion of coal-powered power plants in China and India over the next three to four years will bolster demand for Joy’s mining equipment, Brian Rayle, a Cleveland-based analyst for Northcoast, who recommends buying the shares, said in a report March 13. The pace of China’s economic growth increased to 7.9 percent after seven quarters of deceleration. China’s power consumption will increase by as much as 8.5 percent this year as the economy expands, the China Electricity Council, a group of the nation’s biggest power producers, said Feb. 28.
Joy Global tracks about 400 gigawatts of coal-burning power generation capacity globally and China is in the process of adding 75 gigawatts in the next couple of years, Sutherlin said. Along with higher coal-fired power generation, steel production and export orders in China over the last few months look “encouraging,” said Sutherlin, 66, who will retire in February. Edward L. Doheny II, who has be