Production Capacity Expansion of the Itsukaichi Factory at the Hiroshima Headquarters

November 19, 2018
Kobelco Construction Machinery Co., Ltd.

Kobelco Construction Machinery Co., Ltd. (KCM) headquartered in Tokyo has decided to expand the production capacity of its main factory, the Itsukaichi Factory in Hiroshima so as to accommodate to the steady global demand for hydraulic excavators.

The global demand for hydraulic excavators has generally been stable in developed countries, and we are expecting that the demand in developing countries will still continue stable growth, although their levels vary by regions. Through enhancement of sales networks in each region and expansion of models and specifications depending on the needs of each market, we are expecting that our sales volume of hydraulic excavators will continue to increase steadily. Under such circumstances, by changing the production source flexibly, we have been putting effort into balancing the production in our six hydraulic excavator factories both in Japan and overseas. However, the production load at the Itsukaichi Factory has been increasing due to its wide range of production menus in models and specifications.

The Itsukaichi Factory opened in May 2012 as KCM's ‘mother factory’ of hydraulic excavator with a production capacity of 8,500 units a year. After that, as our sales number increased constantly due to a steady global demand and the re-entry in Europe and American market by the dissolution of the partnership with CNH Global N.V. at the end of 2012, we have expanded the factory's production capacity to 8,900 units a year by improving productivity mainly through manpower increase. This time, we will raise the capacity to 10,500 units a year by a full-out production capacity expansion in order to deal with the still increasing global market demand for hydraulic excavators.

As for the details of the capacity expansion, we are planning to enhance various elements, including production capacity expansion for assembly lines and fabricated products (frames) lines through a drastic revision of the existing layouts, advancement of “smart factory” which promotes the computerization of manufacturing, introduction of efficient assembly processes, upgrading of work safety, and improvement of the workplace environment. These will be carried out step by step and are expected to be completed in March 2020.

With this capacity expansion, we will continue to strive for the manufacturing of competitive products while delivering high-quality products to our customers in a more stable and timelier manner.

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