Kobelco Construction Machinery to Build Facility in North America

KOBELCOKobelco Construction Machinery Co., Ltd. has decided to construct a hydraulic excavator production factory in South Carolina, United States. The new factory will be incorporated into its North American subsidiary, Kobelco Construction Machinery U.S.A. Inc. (“KCMU”) which already operates in North America. With this factory construction, KCMU will be reorganized into a company with integrated production and sales.

After concluding an official purchase agreement for the planned construction site, we will begin site preparation from April this year, construct a building, install machines and equipment, and complete the construction in December, then commence mass production of 20t model from January, 2016.

The site area will be approximately 340,000m2 (85 acres). We will start with an annual production capacity of 1,800 units but plan to sequentially increase the menu and production in accordance with market development.

The target share in North America under the current medium-term management plan whose final year is the fiscal year 2015 is 7% or higher. However, by taking advantage of the local production, we will enhance service functions further, reinforce foundation in North American market by improving after-sales activities including parts sales, continue increasing the presence of Kobelco’s hydraulic excavators, and put a group-wide effort into regaining a 10% share in North America that we had had before we formed an alliance with CNH.

Having a production site in North America will allow us not only to reduce the production lead-time of machineries for North American customers and improve capability for meeting the market needs, but also reduce operational burden on the Hiroshima Itsukaichi Factory and build an optimal group-wide production system.