South Korea’s agricultural machinery maker Daedong Industrial Co. said Friday it entered a five-year contract to supply forklifts in the form of original equipment manufacturing (OEM) with Hyundai Construction Equipment Co.

Daedong Industrial has been preparing the OEM business since last year. It will establish a manufacturing facility capable of assembling 20,000 forklifts a year at its headquarters in Daegu. Under the contract, Daedong will assemble the parts supplied by Hyundai Construction Equipment and deliver finished goods until December 2022.

Daedong will produce diesel and liquefied petroleum gas (LPG)-powered small (1~1.3 ton) and mid-sized (3.5~8t) forklifts and electric forklifts (1~5t). It plans to supply about 14,000 units of forklifts this year alone that can generate 16.5 billion won ($15.5 million) in sales.

The company is estimated to rake in total 100 billion won in revenue from the OEM business over the next five years. An official from Daedong said that it will continue to focus on expanding its OEM business both at home and abroad.

Shares of Daedong Industrial closed Friday down 6.42 percent at 10,200 won from the previous session.

By Song Min-geun and Choi Mira

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