SHANGHAI Diesel Engine Co is spinning off its oil pump operation to pave the way for future equity co-operation with foreign investors, officials say.
A company official said it had been approached by several foreign companies on plans to set up a joint venture company to produce oil pumps.
'The spin-off is the first step towards expanding our oil pump business, which will involve foreign equity participation,' he said.
Shanghai Diesel, which has a 45 per cent stake in a diesel engine joint venture with Caterpillar of the United States in Shanghai, makes oil pumps for its own needs only.
The official would not say if the new operation could replace existing imports supplying the joint venture with Caterpillar.
'We want to expand the clientele base of our oil pump business to the rest of China,' the official said.