Timken, Xiangtan Elect JV to build wind turbine bearings

BEIJING, Dec 10 (Reuters) - Timken Co (TKR.N: Quote, Profile, Research, Stock Buzz), the world's third largest bearings maker, and Chinese heavy equipment maker Xiangtan Electric Manufacturing Co signed a deal on Monday to jointly build ultra-large bore bearings for wind turbines for the Chinese market.

The US$38 million joint venture in Xiangtan in China's Hunan province will be 80 percent owned by Timken and will employ more than 110 people. Construction is scheduled to begin next year.

"We put this investment in really based entirely on Chinese demand," Roger Lindsay, senior vice president of Asia Pacific, told Reuters in an interview.

The venture's output will contribute to China's goal of producing 30 million kilowatts of electricity from wind energy by 2020.

Ohio-based Timken reported lower-than-expected profit in the most recent quarter and lowered its 2007 profit forecast, as its automotive group posted a loss and manufacturing and raw materials continued to rise.

Timken has said it aims to increase sales in Asia by up to 25 percent annually in the coming years, driven largely by demand in China, its largest market in the region.

The company, whose bearings can be found in a range of products from roller coasters and automobiles to jet engines, has invested about $300 million globally in each of the past two years. (US$=7.40 yuan)