Reorganization and Consolidation of Group Companies

December 6, 2016
Kobelco Construction Machinery Co., Ltd.

Following the consolidation with Kobelco Cranes Co., Ltd. conducted on April 1 this year, Kobelco Construction Machinery Co., Ltd. (or KCM), headquartered in Tokyo, Japan will implement a reorganization and consolidation of its group companies in Japan and overseas.

As a first step in the reorganization and consolidation process, KCM will consolidate and newly establish overseas subsidiaries as described below. To maximize the effects of the consolidation with Kobelco Cranes such as improvement of management efficiency, strengthening of product development capabilities, and enhancement of global expansion, KCM will carry out the reorganization and consolidation of group companies step by step.

First Step of the Reorganization & Consolidation of Overseas Group Companies

1. The Middle East and Africa

To expand sales in the Middle East and Africa, KCM established a subsidiary in Dubai, United Arab Emirates to sell hydraulic excavators and crawler cranes and provide after-sales service in the region.

Originally, KCM’s excavator business and crane business had been handled by an overseas representative office in Bahrain and by Kobelco Cranes Middle East FZE., a subsidiary in Sharjah (an emirate next to Dubai), UAE respectively. Through the consolidation of the local business operations as well as the development and improvement of the sales, distributor network, and after-sales service network in the region, KCM will establish a strong local sales network.

Kobelco Cranes Middle East FZE. in Sharjah, UAE, which was handling the crane business, will be liquidated.

Outline of the Company

Company Name: Kobelco Construction Machinery Middle East & Africa FZCO.
Head Office: Dubai, UAE
Capitalization: 8 million UAE. dirham (about 232 million Japanese yen)
Stockholder: Kobelco Construction Machinery Co., Ltd. 100%
Purpose: Sales and service operations of hydraulic excavators in the Middle East and Africa
Sales and service operations of crawler cranes in the Middle East
Established: October 1, 2016
Employees: Initially 11
Start Date: November 1, 2016

2. Americas

To streamline the business in the Americas and enhance global expansion, KCM will consolidate two subsidiaries currently being run in the U.S. The company after the consolidation will 1) manufacture and sell hydraulic excavators and oversee excavator dealers and 2) sell crawler cranes and oversee crane dealers in the Americas.

Originally, KCM’s excavator business and crane business had been handled by Kobelco Construction Machinery U.S.A. Inc. (or KCMU) headquartered in Katy, Texas and by Kobelco Cranes North America Inc. located in Houston, Texas respectively. However, in order to improve the business efficiency of these subsidiaries and optimize their operations, KCM will merge Kobelco Cranes North America Inc. into KCMU to develop and improve sales, the dealer network and after-sales service network in the Americas to further improve KCM’s local sales network.

Outline of the Company after Consolidation

Company Name: Kobelco Construction Machinery U.S.A. Inc.
Head Office: Katy, Texas, USA
Capitalization: US$2,300
Stockholder: Kobelco Construction Machinery Co., Ltd. 100%
Purpose: Manufacture, sales and service operations of construction machinery in North, Central and South America
Established: July 2, 2001
Employees: 146 (tentative)
Start Date: January 1, 2017

Reference

Consolidation announcement news release dated December 21, 2015
“Kobelco Construction Machinery and Kobelco Cranes to merge”

*The information contained herein is as of the date this announcement was made and it may be changed without a prior notice.