World famous construction machinery manufacturer Komatsu Group announced to produce medium-duty hydraulic excavator, skid steer loader and industrial forklift in Russia. This will be done by Komatsu (Russia) Co., Ltd., a full-funded subsidiary of Japanese Komatsu. It will invest RMB 6.9 billion Yuan to establish a new production base with area of 500,000 m² lying in Yaroslav, 208km to the northeast of Moscow. The workshop area will be 42,000 m² and there will be estimated 500 employees. The base will be built up and put into production in June, 2010.    

PC200 tracked excavator will be initially manufactured in the newly-built Komatsu Russia Plant, and 1t, 2t ICE forklifts and electric forklifts will also be the products first to roll off the line then. PC 300 and PC 400 tracked excavators will be produced gradually. The Yaroslav Plant in Russia to be constructed is the second plant of Komatsu in Russia as well as the 47^th plant of the Group in the world. Early in 1998, a joint-venture company in Lvanovo in Russia began to conduct metal plate processing of the hydraulic excavator for Komatsu Plant in UK.

Komatsu Russian Production Base will realize production capacity of manufacturing 3000 sets of excavators and 7000 sets of forklifts annually, which will faster the pace of localization of Komatsu products in Russia. Komatsu can make use of the opportunity to provide products of more forceful market competition to Russia so as to add weight to compete with Hitachi. Presently, Russian excavator market has a space of 5000 sets of annual sales, and Hitachi holds the controlling advantage temporarily.  

New Excavator Plant

Komatsu announced to construct a new plant to manufacture PC400 heavy-duty mining-used hydraulic excavator in Japan. This plant will be located in Awagasaki near Kanazawa with excellent shipping advantage. With an area of 104,600 m² and investment of RMB 5.3 billion Yuan, this plant will be built up and put into production in August 2009. Komatsu has two plants manufacturing heavy-duty mining-used excavators in German Dusseldorf and Japanese Kobe. Komatsu expressed two reasons why establishing new plants: one is that Ishikawa and Kanazawa Government are making their efforts to increase the handling capacity of Kanazawa Port to make it a large-scaled international port, which will offer more convenience for transporting products in Komatsu in the future; on the other hand, Ishikawa was the root of Komatsu, and there gathered a lot of suppliers with cooperative relationship in a long run, such as Kanazawa 1st Plant manufacturing pressing parts and Ibaraki Plant providing matching parts for wheel loader. Awagasaki lies near the port, which will be a good choice for Komatsu to lower inland transportation cost and reduce emission of CO₂ to protect the environment.

Business Development in China

As shown on a development report of Komatsu comprising of three parts, the company has gradually considered China as one of production bases to export products to other areas in Asia rather than a pure sales market. It is reported that Komatsu plan to enhance 1/3 of its hydraulic excavator production capacity in China in 2010, which will take RMB 5 billion Yuan.

Komatsu manufactured 10-40t hydraulic excavator in Ji’ning Plant in China since before, and now they are conducting a negotiation about buying land of 100,000 m². If everything goes well, Komatsu will construct a metal plate plant and an assembly plant in the autumn of 2008. On the aspect of large-scaled equipments such as 40t mining-used hydraulic excavators and rigid dump trucks, Komatsu will construct the second plant in Changzhou, China in 2008, and put 45t hydraulic excavators into Chinese market. Meanwhile, small-scaled excavators are still manufactured in specialized plant in Ji’ning, Shandong, which is specially supplied for the Japanese market.

The third part of the report is about the expansion of casting business. Komatsu will build a new casting plant in Ji’ning. Like other Japanese construction machinery manufacturers, Komatsu also felt the supplying pressure from the upstream of the supply chain. The newly-built casting plant will supply for the plant of Komatsu in Japan to relieve the supplying pressure.

Till September 30^th, 2007, Komatsu’s market performance of all the products increased in successive 6 half-fiscal years, performing well not only in terms of construction machinery and mining equipments, but also industrial vehicles such as forklifts and other equipments.

The sales revenue of Komatsu in the half-fiscal year in 2007 reached 10 billion dollars until September 30^th, 2007, increasing 21.6% than the previous fiscal year. The demand of construction machinery and mining equipments kept rapidly increasing due to the motivation of infrastructure construction all over the world. Operation income of such business reached 1.5 billion dollars in the half-fiscal year, realizing a year-on-year increase of 44.8% compared with previous fiscal year. The operating margin of Komatsu amounted to 15.1%, having an increase of 2.4% compared with previous fiscal year. As for the sustainable income before tax, several operation income from associated companies also increased 47% to 1.5 billion dollars, in which net income was 965 million dollars, a year-on-year increase of 54.4% than the previous fiscal year.

Obvious operation income increase not only showed the expansion of sales scales in Komatsu, but also revealed Komatsu products were playing an active role in the price mechanism in Japan and foreign markets.

About Komatsu

Specialized in manufacturing and sales of construction and mining equipment and industrial machinery & vehicles, Komatsu is also expanding its businesses into other areas such as housing, transportation and logistics equipment.

Komatsu Group consists of Komatsu Ltd., and 187 other companies.