Aug 22, 2007
Kobelco Construction Machinery to Produce Excavators in Thailand
Core Plant for Southeast Asia to Start Up in April 2008

Kobelco Construction Machinery Co., Ltd. announces that its Thai subsidiary, Thai Kobelco Construction Machinery Co., Ltd. will construct a plant in Thailand to produce complete hydraulic excavators. Production of 20-ton class excavators is anticipated to commence in April 2008.

Serving as the core plant for the Southeast Asian region, the new facility will be Kobelco's first plant to manufacture complete machines in Southeast Asia. The plant will help meet the growing demand for construction machinery in the region.

The new 1.7-billion-yen facility will be located in the Eastern Seaboard Industrial Estate in Rayong Province, Thailand, about 17 km southeast of Bangkok. On a site covering 72,000 square meters, the plant will have a production capacity of 2,400 units per year. By July 2009, the plant is expected to employ about 200 people.

In recent years, the construction machinery market has grown steadily in all Southeast Asian countries, not just Indonesia, Thailand and Malaysia where demand has traditionally been strong. In 2006, regional demand for hydraulic excavators reached about 6,700 machines, an 85% increase over 2003. To meet the growing market, Kobelco decided to build a plant in Thailand to manufacture complete hydraulic excavators.

The new plant will be Thai Kobelco Construction Machinery Co., Ltd. second manufacturing facility in Thailand. In 1996, Kobelco set up Thai Kobelco Construction Machinery Co., Ltd. as a wholly owned subsidiary to make excavator parts. The Thai company has been producing welded steel structural components for excavators for more than 10 years. Until now, Kobelco has been supplying the main body sections from Japan to sales bases in Southeast Asia, where they have been completed with components including booms, arms and buckets manufactured by Thai Kobelco Construction Machinery Co., Ltd.

From next year, the new finished machine plant, to be built near Thai Kobelco Construction Machinery Co., Ltd., will bring together the whole process – from components supply to assembly of complete machines. This will provide Thai Kobelco Construction Machinery Co., Ltd. with a fully integrated production system. The new facility, seen as a core plant for Southeast Asia, will boost Kobelco's presence, utilizing its coastal location to supply excavators to the region.

In other areas, Kobelco Construction Machinery is increasing its production capacity in China, where demand has grown to enormous proportions, and at the master plant in Japan, which is responsible for supplying Kobelco products worldwide. By 2008, production capacity is expected to grow 40% in Japan and 30% in China, in comparison to 2006.

When Thai Kobelco Construction Machinery Co., Ltd. new plant is completed, the Kobelco Construction Machinery Group will have production plants for complete machines in three locations: Japan, China and Thailand. Kobelco will be well positioned to supply Asia, as well as meet increasing world demand for excavators.