Oct 13, 2009
Kobelco Construction Machinery to make excavators in India
Kobe Steel Group’s first manufacturing facility in India to open in 2011

Kobelco Construction Machinery Co., Ltd., a group company of Kobe Steel, Ltd., plans to construct a plant to manufacture hydraulic excavators in India.

The new plant will operate under Kobelco Construction Equipment India Pvt. Ltd. (or KCEI), which currently markets and services KOBELCO-brand excavators from its headquarters in Noida, 20 kilometers east of Delhi. The plant will be the first manufacturing facility of the Kobe Steel Group in India.

KCEI is a joint venture between Kobelco Construction Machinery and the ITOCHU Group. Kobelco holds a 95% equity share of KCEI, while ITOCHU holds the remaining 5%.

The plant will be situated in the Sri City Special Economic Zone, about 75 kilometers north of Chennai in southeastern India. A 5,300-square-meter facility will be constructed on 68,000 square meters of land and will have assembly, painting and shipping lines. Total investment in the land, building and equipment will come to approximately 900 million yen.

Start up is scheduled for January 2011, with an initial production capacity of 1,200 units per year. KCEI will produce 20-tonne-class KOBELCO-brand machines renown for their quality and high performance. Demand in India is the highest for this class of excavators. Flexible plant equipment will enable KCEI to also make large machines to meet future demand trends and marketing situations.

India, with its high population and vast land area, is a growing market for construction equipment. India’s excavator market was approximately 8,500 units in fiscal 2008, ended December 2008. Demand grew 2.6 fold in the four years from 2004 to 2007. With an annual growth rate of 37%, India’s excavator market is projected to continue expanding for the foreseeable future.

When the Indian plant is finished, Kobelco Construction Machinery will have manufacturing facilities at six locations in four countries: Japan, China, Thailand and India.

The Kobe Steel Group has other operations in India. In June 2009, Kobe Steel established a company in Kolkata to market steel production equipment, while subsidiary Shinsho Corporation, a trading company, plans to open a representative office in New Delhi in December this year. Subsidiary Kobelco Cranes Co., Ltd., which sells cranes, has a representative office in New Delhi.

Profile of Kobelco Construction Equipment India Pvt. Ltd.