Kobelco Construction Machinery Co., Ltd.  

June 03, 2011
Kobelco begins construction of new manufacturing complex in Japan

Kobelco Construction Machinery Co., Ltd. plans to build two new facilities in Japan: the Global Engineering Center (GEC) and a new factory in Itsukaichi, Hiroshima.  A groundbreaking ceremony was held on June 3 at the site of the new complex.

About 60 guests participated in the ceremony, including Hiroshima Governor Hidehiko Yuzaki; Takeshi Okutani, Director of the Hiroshima Port and Airport Office, Chugoku Regional Development Bureau, Ministry of Land, Infrastructure, Transport & Tourism; and Hideki Nakata, Mayor of Saeki Ward, Hiroshima.

Executive Vice President Hiroaki Fujiwara of Kobelco’s parent company Kobe Steel, Ltd. and Shigeto Kotani, President of Kobelco, also attended the event.

“The ‘Lehman shock’ threw the world economy into recession and delayed construction of our new facilities,” said Kotani.  “We decided to wait for a more conducive time. As our business has now improved, we decided to officially start construction of our long-planned new manufacturing complex,” he said.

“In the course of events, Japan has begun to hollow out. But Japanese industry does not intend to discard its pride and its own country,” commented Kotani.  “We have carried out development in Japan. We have honed our production technology, productivity and manufacturing capabilities to the highest levels here.  Whether it is the high yen or other factors, we intend to maintain our manufacturing base in Japan. The Itsukaichi complex will optimize production and serve as a ‘control tower’ providing guidance to the entire Kobelco Construction Machinery Group,” added Kotani.

The new facilities are scheduled to go into operation in May 2012.  The GEC will function laterally across the Kobelco Construction Machinery Group, optimizing development and production throughout the Group.  Production of medium-size excavators currently made at the Gion Factory and large excavators made at the Numata Factory will be consolidated at the new Itsukaichi Factory.  This will enable Kobelco to attain the highest levels of productivity and competitiveness.  In addition to the current number of employees, Kobelco plans to hire 100 additional people over the next five years.

Large-scale investments have been frozen following the financial crisis precipitated by the Lehman Brothers bankruptcy.  To grow on a global scale, the Kobelco Construction Machinery Group intends to raise its domestic production bases to the highest standards.  Kobelco aims to strengthen technology development and manufacturing. At the same time, it plans to improve the supply chain and management system within the entire Kobelco Construction Machinery Group.

Global Engineering Center

Objective: Play a primary role in optimizing development and production in the Kobelco Construction Machinery Group.
Goals in 2015: 1) Reduce development lead time in half.
2) Increase productivity by 30% or more, in comparison to worldwide production bases.
3) Reduce the cost of worldwide parts procurement by 5%.

Itsukaichi Factory

Objective: Achieve top manufacturing capabilities in the world and the highest levels of productivity.
Goals: 1) Double productivity.
2) Halve the inventory of parts and completed excavators.
3) Halve production leadtime.
Products: 7- to 95-tonne-class hydraulic excavators.
Capacity: 8,500 units per year.

Profile of GEC and Itsukaichi Factory

Location: Saeki Ward, Hiroshima City, Hiroshima, Japan
Business: Development and manufacture of hydraulic excavators.
Land area: 100,000 sq m
Building area: 35,000 sq m
Total investment: 19.8 billion yen
Completion: End of January 2012
Start-up: May 2012 (Transfer of operations from current plants to Itsukaichi to be completed by the end of March 2013.)
Facilities: Development Center, Advanced Technology Center, Training Center, factory office, Assembly Building, Manufacturing Building and Shipping Building.

Groundbreaking ceremony Remarks  by President Shigeto Kotani
Groundbreaking ceremony Remarks by President Shigeto Kotani
Artist's rendition of entire complex Planned construction site for the Global Engineering Center and Itsukaichi Factory
Artist’s rendition of entire complex Planned construction site for the Global
Engineering Center and Itsukaichi Factory