Sept. 8 (Bloomberg) -- Kone Oyj, Europe’s third-largest elevator maker, is studying takeovers of U.S. service companies to take on United Technologies Corp.’s Otis elevator unit in its home market and boost profit as new equipment sales drop. “We are actively looking for new acquisition opportunities in North America,” Chief Executive Officer Matti Alahuhta said today in an interview at the company’s headquarters in Espoo, Finland. “Higher density of the maintenance base always helps in productivity.” Alahuhta said the market for new equipment continued to weaken in the third quarter. That’s raised pressure on Kone to expand its business for existing elevators. This year alone, Kone has bought two U.S. services companies, FairWay Elevator Inc. in Philadelphia and Excel Elevator Inc. in Los Angeles. Kone, which competes with market leader Otis, Schindler Holding AG of Switzerland and Germany’s Thyssenkrupp AG in the global elevator and escalator business, is cutting 40 million euros in spending and 500 jobs by next year to adapt to lower demand. Sales growth in the second half will be “somewhat weaker” than the 6.9 percent increase in the first six months, Alahuhta said today. “At the moment we have a strong balance sheet, we have no debt,” Alahuhta said. “If we would get an acquisition opportunity for a bigger company, we would also study that actively.” Chinese Focus Alahuhta said he’s is also focusing on China as a source of growth in the new equipment market. Kone, the fourth-largest elevator maker in the country after ranking eighth five years ago, has sought to raise its share of the service business and will likely take market share in China this year, the CEO said. “Some of our competitors have given the maintenance opportunity to their distributor” in China, he said. “We at Kone have seen the maintenance opportunity as strategically very important.” Alahuhta joined the company 4 1/2 years ago from mobile- phone maker Nokia Oyj. He took over in 2006 from Antti Herlin, whose family controls the company. Under his stewardship, Kone lifted its operating margin, or operating profit as a percentage of sales, from about 8 percent to 12.1 percent last year. Alahuhta said he is “confident” he can lift operating profit to as much as 595 million euros this year. He also reiterated his long-term operating margin target of 14 percent. “We are convinced that one day we will reach this,” he said. “But the time, in this environment, we want to keep open.”

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