Kubota Corp. plans to spend some ¥20 billion to build three new plants in the United States in an effort to strengthen overseas operations, Masatoshi Kimata, president of the Japanese construction machinery maker, said in a recent interview.
The move comes amid sluggish demand for agricultural machinery in Japan due to a decrease in the number of farmers.
The three new plants are for the production of compact machinery for housing construction, engines for construction machinery, and multipurpose four-wheel vehicles that can be used for agriculture and leisure purposes. Kubota aims to bring the plants online by 2022.
The plant for compact construction machinery will be built in the Midwest, where Kubota has sales and logistic bases, at a cost of up to ¥10 billion. Construction will start next year.
In North America, demand for compact construction machinery has been growing on the back of an expansion of housing construction.
Kubota’s decision to build the new plant for compact construction machinery comes as its existing production facilities are in full operation.
The plants to make construction machinery engines and multipurpose four-wheel vehicles will be built in Georgia with an investment of some ¥5 billion each.
This will mark the start of engine production for Kabata in the United States. So far, Kubota has exported construction machinery engines to the U.S., but by launching production in the country, the firm aims to make production efficient and reduce foreign exchange risks. Kubota plans to supply the engines to local construction machinery makers and others.
Construction of the multipurpose four-wheeler plant comes as an existing plant in Georgia, which launched full operations last year, is expected to be unable to meet demand for a planned new model launch this year, Kimata said.