April 28, 2022
Kobelco Construction Machinery Co., Ltd.
Tokyo, April, 28, 2022 - Kobelco Construction Machinery Co., Ltd. (or KCM), headquartered in Tokyo, has decided to expand the production capacity of Ogaki Plant, which is KCM's mini-excavator production site located in Ogaki, Gifu Prefecture, Japan, in order to adapt itself to the changing business environment swiftly and flexibly.
Although the global demand for hydraulic excavators declined due to the COVID-19 pandemic, it has been mostly steady in the advanced countries. Also, it varies by region in the developing countries except for China, but it is expected that it will continue to see a stable growth. KCM will put effort into steadily increasing its sales volume of hydraulic excavators through measures such as sales network enhancement in each region as well as improvement and addition of models and specifications tailored to each market's needs.
Under such circumstances, KCM decided this February to sell and transfer the North American plant of its U.S. subsidiary, Kobelco Construction Machinery U.S.A. Inc., to Takeuchi Mfg. Co., Ltd. for about 3.95 billion yen and to improve its competitive strength by relocating the entire production of hydraulic excavators, which used to be performed at its North American Plant, to Itsukaichi Plant. To deal with the increased production load at Itsukaichi Plant (production capacity of 10,500 units a year) due to the relocation, and in order to build a flexible product supply system that is highly adaptable to changes in circumstances, KCM will increase Ogaki Plant's production capacity in such a way that these two plants complement each other.
At Ogaki Plant, we will establish a new hydraulic excavator assembly line with a capacity of 3,000 units/year. At the same time, we will also increase the plant's fabrication capacity in order to increase the plant's production capacity from 8,500 to 11,500 units/year. The new assembly line will handle the 7-ton machines, which are also manufactured at Itsukaichi Plant in Hiroshima, and the 5-ton machines, which are also manufactured at the Ogaki Plant's existing line, so as to establish a mutually complementary production system with Itsukaichi Plant, enabling flexible production according to the changes in the number of machines.
| Address | 1682-7 Motoima-cho, Ogaki-shi, Gifu 503-0932 |
|---|---|
| Products | 1- to 5-ton mini excavators (7-ton hydraulic excavators will be added upon expansion.) |
| Ships products to | Worldwide |
| Production Capacity | Currently 8,500 mini excavators a year ⇒ 11,500 units/year upon expansion (Current capacity of 8,500 units/year + Dedicated line for 5-ton and 7-ton machines with a capacity of 3,000 units/year) |
| CAPEX | About 3.4 billion yen |
| Schedule | To be completed in summer of 2023 |
In the KOBELCO Group Medium-Term Management Plan (fiscal years 2021-2023) announced last year, KCM set "a departure from dependency on the Chinese market" as one of the objectives toward ensuring a stable foundation for revenue generation, and this capacity expansion is part of the effort. KCM is also considering other measures to continually strengthen its global strategy both in terms of manufacturing and sales. Updates will be announced as soon as they become available.
Under the business philosophy of "user hands-on approach", KCM will continue to strive toward further development of technologies, toward provision of products with better value, and toward an improvement of the quality and stability of its business operations in which its manufacture and sales sectors coordinate seamlessly.
*The information contained herein is as of the date this announcement was made and it may be changed without prior notice.
