South Korea?s top shipbuilder Hyundai Heavy Industries Co has sealed a deal to set up a joint venture (JV) with Cummins Inc in order to make inroads into the con?struction equipment engine business.

Under the contract, the JV Hyundai Cummins Engine Co will be located at an industrial complex in Daegu, 302 km south of Seoul and start mass production from 2014. Hyundai Heavy said that the JV is expected to post KRW 320 billion in sales in its
first year.

The two companies will invest a combined $66 million and hold a 50 per cent stake each in the JV. Hyundai Heavy said that the JV will help the company have a steady supply of engines for construction equipment as the company is increasingly extending its business in the field worldwide.