Komatsu Ltd., the world’s second-largest construction equipment maker, plans to double production this financial year to meet demand from China and Indonesia.
About 85,000 building and mining machines will probably be manufactured in the year ending March 31, compared with 44,000 a year earlier, Executive Officer Masahiro Uegaki said in an interview at the company’s Tokyo headquarters. That’s 60 percent higher than its outlook released in April.
Komatsu raised its first-half profit forecast 41 percent this month, citing demand in Asia and a faster than expected recovery in the U.S. China, the company’s largest market, where it’s competing with rivals, including Caterpillar Inc., expanded 10.3 percent in the second quarter.
“China’s strength is outstanding,” Uegaki said Thursday. “Indonesia is also strong; the markets for the country’s mining, agriculture, forestry and construction sectors are all good.”
Komatsu set up a buying department in China in April, sending more than 20 executives and managers from Japan to fend off competition from Caterpillar, the world’s top construction machinery maker, and Hitachi Construction Machinery Co. and China’s Sany Heavy Industry Co.
Komatsu is the largest overseas supplier of excavators, wheel loaders and other heavy machines to China.
The company raised its estimate for global steel buying for this fiscal year to about 99,000 tons a month from 57,000 tons, Uegaki said. About 48,000 tons of steel will be consumed in Japan every month, he said.
Komatsu buys steel from local suppliers for use in the exterior and arms of excavators sold in China, Uegaki said. Japanese steel is still used in the high-pressure tubes of the machines and in large mining dump trucks sold worldwide, he said.
Komatsu’s suppliers include Nippon Steel Corp. and JFE Holdings Inc., Japan’s two largest steelmakers, and Baosteel Group Corp., China’s second-largest mill.
Net income at Komatsu may climb to ¥52 billion in the six months to Sept. 30, compared with its April estimate of ¥37 billion, the company said Tuesday. Komatsu earned ¥8.2 billion a year earlier. Sales may reach ¥870 billion, beating its forecast by about 7 percent.
China surpassed Japan as Komatsu’s largest market last fiscal year, accounting for 19 percent of its sales, as the country’s investment in roads, railways and buildings drove demand for construction, especially in the hinterlands.
Indonesia’s economy may have expanded more than 5.7 percent in the second quarter, bolstered by growth in investment and exports, Diffi A. Johansyah, a spokesman at the nation’s central bank, told reporters in Jakarta on July 2.
Toshiba’s China JV
Toshiba Corp. said Thursday it will set up the joint venture Toshiba Visual Products (China) Co. with Chinese consumer electronics maker TCL Corp. to sell liquid crystal display televisions.
The move is aimed at boosting the electronics company’s sales network in the burgeoning Chinese market as it forecasts the nation’s LCD TV market will nearly triple in fiscal 2012 from fiscal 2009.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.