• Bloomberg


Komatsu Ltd., the world’s second-largest construction machinery maker, said Japan’s bid to rebuild from its worst postwar disaster is spurring demand at home amid slumping sales in China, its biggest market.

Domestic orders have risen more than 30 percent in April-June from a year earlier, Chief Executive Officer Kunio Noji said in Tokyo. Sales in China, which fell about 40 percent over the past two months, may not revive until the Lunar New Year in January, which kicks off the peak season, he said.

Sales of excavators and wheel loaders are likely to grow for the next three to five years as Japan spends an estimated ¥16.9 trillion to rebuild bridges, roads and buildings destroyed by the March 11 earthquake and tsunami.

Orders in China, which overtook Japan as Komatsu’s largest market in 2009, slowed as the government tightened credit to cool the economy.

“There’ll be much rebuilding work, given the damage is more extensive than the Kobe earthquake,” Noji said Thursday, referring to the 1995 quake that affected a smaller area and didn’t trigger tsunami.

Komatsu’s Japan sales are forecast to rise 1.4 percent to ¥255 billion this fiscal year, the company said April 27, without accounting for postearthquake demand. Chinese sales may reach ¥380 billion, it said.

The Chinese government’s measures to tighten credit and the delay in approving some public works projects slowed demand for construction machinery, Nomura Securities Co. said in a May 27 report.

Komatsu’s excavator sales in China fell 42 percent in May from the same month a year earlier after an 8 percent gain in April, Nomura said in a June 2 report.

Komatsu aims to defend its lead over local rivals in China, including Sany Heavy Industry Co., by offering customers value-added products such as hybrid machines that run on electricity and diesel and come GPS-equipped, Noji said. Sany Heavy’s excavators are priced about 25 percent lower than Komatsu’s, he said.

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