Kobelco building North American factory

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Kobelco Construction Machinery is to construct a hydraulic excavator production factory in South Carolina, USA. The new factory will be incorporated into its North American subsidiary, Kobelco Construction Machinery USA (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, site preparation will begin in April this year with construction completed in December, before it commences mass production of the 20t model from January, 2016. The site area will be approximately 340,000m2 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 with its final year being fiscal year 2015 is 7% or higher. However, by taking advantage of the local production, KCMU will enhance service functions further, reinforcing its foundation in the 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 the 10% share in North America that it had had before forming an alliance with CNH.

A North American production site will not only enable a reduction in production lead-time of machinery 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.

Currently, Kobelco’s entire volume is being shipped from the Hiroshima Itsukaichi factory in Japan; however, market development has been proceeding at a faster rate than expected and the Itsukaichi factory is operating at a production level of 10,500 units which significantly exceeds the current production capacity of 8,500 units. However, further production increase is limited, and prevention of opportunity loss was a major issue. Even after the production of the standard models for the US is transferred to KCMU, the Hiroshima Itsukaichi factory is expected to maintain a full production to accommodate the expansion of newly developed areas centering on Europe and the Middle and Near East.

It was therefore decided to manufacture standard hydraulic excavators for the USA in North America because capacity shortage is expected sooner or later due to the market development speed. As for the production menu, standard models of heavy excavators for North America have been planned. Special machines and mini excavators will continue to be supplied from Japan.

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Tom Stone is Editor of the iVT brand – which includes digital and print editions of a quarterly magazine, Off-Highway Annual, and the Advanced Lift-truck supplement, as well as ivtinternational.com, which is updated daily. Tom has met and interviewed some of the world's leading industrial vehicle OEM presidents, CEOs and MDs, and takes great pride in cementing iVT's place as the leading forum for debate within the industry, a reputation that his been built up over the brand's 25-year history.

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