ST Engineering today announced that its land systems arm, Singapore Technologies Kinetics, has established a wholly-owned Indian subsidiary, LeeBoy India Construction Equipment Pvt Ltd, with a total investment of about $50 million, comprising $16.7 million in equity and shareholder’s loan of up to $33.4 million which will be made in two phases.

Immediately after the incorporation of LeeBoy India, the management of the company will take up 3% of the $16.7 million equity of the company.

India is currently the fifth largest construction equipment (CE) market in the world, with annual sales of over US$2.4 billion ($3.2 billion) in 2009 and an expected growth rate of over 19% over the next five years.

LeeBoy India is set up as a greenfield operation to market, manufacture and support a range of ST Kinetics’ CE products, from road construction and maintenance equipment to excavators and off road dump trucks, to meet the growing needs of the Indian CE market.

LeeBoy India will be located in Bangalore, one of India’s key hubs for the manufacture of CE, with an extensive network of high quality suppliers and production capabilities. Bangalore also has a good supply of skilled labour, a pro-business environment with good labour relations management, and a relatively efficient power supply and infrastructure system.

ST Engineering says the establishment of LeeBoy India is part of ST Kinetics’ strategy to grow its Specialty Vehicles and Services business to become a more significant player in the global road construction and maintenance equipment, excavators and off road dump truck segments of the CE industry.