On June 24, a wholly-owned subsidiary of Kobe Steel Co., Ltd. in Tokyo, Japan, shinkansteel Construction Machinery Co., Ltd. (hereinafter referred to as "shinkansteel construction machinery" or KCM) released news on its official website!
Kobelco Construction Machinery Co., Ltd. has decided to merge its subsidiary in China Hangzhou Kobelco Construction Machinery Co., Ltd. (hereinafter referred to as "Hkcm") into Kobelco construction machinery (China) Co., Ltd. (hereinafter referred to as "kcmc"). At the same time, further improve the capacity of Kobelco construction machinery India Co., Ltd. (hereinafter referred to as "kcei") in India.
The implementation of the above decision marks the completion of a series of measures taken by JSC construction machinery to restructure and strengthen the global excavator production system, including "transfer of hydraulic excavator factory in North America" and "capacity expansion of Japan's OHKI factory".
Current market environment
In terms of the global market demand for hydraulic excavators, although the current COVID-19 has declined, the demand in developed countries has remained basically stable. The demand of developing countries other than China is expected to grow steadily, but the demand of different regions will vary. Kobelco Construction Machinery Co., Ltd. plans to meet different market demands by strengthening the sales network in some regions and expanding product models and specifications, so as to steadily increase the sales of its hydraulic excavators.
On the other hand, the demand of the Chinese market is different. In recent years, China's hydraulic excavator market, which accounts for about 50% of the global demand, has been on a downward trend (especially the market share of foreign brands), and the competition of excavator brands from China is becoming increasingly fierce. The current market share of foreign brand manufacturers has dropped to about 20% (about 50% in 2018). In addition, the sales price of excavators in the Chinese market fell sharply, which adversely affected the construction machinery business of Kobelco group, which takes China as the main profit-making market.
Overview of production and supply system structure adjustment and capital investment
The measures to restructure the global production and supply system of Sinosteel Construction Machinery Co., Ltd. are aimed at optimizing the supply chain system from a global perspective according to the changes in China's market environment, so as to stabilize sales revenue and reduce production costs.
1. merge China's production business into Kobelco construction machinery (China) Co., Ltd
At present, for the production of hydraulic excavators in the Chinese market, the two factories of "Hangzhou Kobelco Construction Machinery Co., Ltd." and "Kobelco construction machinery (China) Co., Ltd." will be merged. After integration, Kobelco construction machinery (China) Co., Ltd. will be responsible for the production, manufacturing, sales and operation. After adjustment, the production (assembly) capacity of JSC construction machinery in the Chinese market will be reduced from 10500 sets / year to 5500 sets / year.
In addition, the parts supply and complete machine assembly capacity of Hangzhou Kobelco Construction Machinery Co., Ltd. will also be transferred to Kobelco construction machinery (China) Co., Ltd., and most other businesses will be transferred to Indian factories. This adjustment and transfer is being carried out in stages and is expected to be completed around January 2023.
2. improve the production capacity of Kobelco construction machinery India Co., Ltd
Kobelco Construction Machinery Co., Ltd. will make its Indian plant the main plant for excavator products, and its assembly capacity will be expanded from 3000 sets / year to 4700 sets / year. The cost competitive advantage of the plant is very obvious. It will mainly provide product assembly services for Kobelco construction machinery Southeast Asia Co., Ltd. located in Thailand.
3. transfer of North American plant of Sinosteel Construction Machinery Co., Ltd
Due to the problem of engine certification, the North American plant of Kobelco Construction Machinery Co., Ltd. has been suspended from operation in May 2021. The plant was transferred to Takeuchi mfg. Co., Ltd. at a price of about 3.95 billion yen. The hydraulic excavator production business of its North American plant was transferred to itsukaichi plant of Kobelco Construction Machinery Co., Ltd. to increase its comprehensive competitiveness.
4. improve the production capacity of Dayuan factory
A new hydraulic excavator assembly line will be built in the Dayuan plant of Kobelco Construction Machinery Co., Ltd., which will increase the annual production capacity of 3000 sets and increase its output from the current 8500 sets / year to 11500 sets / year.
The new production line will be specially equipped with two types of hydraulic excavators, one is to produce 7-ton hydraulic excavators in itsukaichi factory in Hiroshima, Japan, and the other is to produce and assemble 5-ton hydraulic excavators in the existing production line in ohigaki factory, Japan.
The new assembly line of the ohigaki factory and the Hiroshima itsukaichi factory complement each other and further strengthen the production capacity, which will better respond to the changes in market sales.
Expected effect after adjustment of global production system structure
By implementing a series of global capacity structure adjustment measures aimed at steadily optimizing China's business, increasing the capacity of some regions with high demand, and strengthening the profit structure of India's business, it is estimated that the annual sales revenue of Kobelco construction machinery will be nearly 10billion yen (especially: in fiscal year 2024 and beyond, after all relevant investments are completed).
Under the business philosophy of "user site orientation", SGCC will continue to be committed to the continuous improvement of technological innovation, provide more valuable products, improve the quality and stability of its business operations, and achieve efficient cooperation between manufacturing and business departments.
As a member of Kobe Steel Institute, JSC Construction Machinery Co., Ltd. will stimulate employees' innovation ability and technical solutions to a greater extent, and provide solutions to meet social needs through advanced R & D technology.
Relevant information:
Kobelco construction machinery (China) Co., Ltd
Kobelco construction machinery (China) Co., Ltd. is a full-time company invested 100% by Kobelco Construction Machinery Co., Ltd.
Business scope: R & D, production, sales and leasing of hydraulic excavators and other engineering construction machinery, agricultural machinery (including agricultural hydraulic excavators), building disassembly machinery, automobile disassembly machinery, material grabbing machinery, cranes and related second-hand products (including imported second-hand products), mechanical equipment, as well as parts and materials of the above products; Warehousing services (excluding hazardous chemicals) and transportation services; Technical consultation, technical development and enterprise management consultation of mechanical equipment; Wholesale of plastics and plastic products (except natural rubber), glass and glass products, hardware products, electrical machinery and equipment and their parts and components, and measuring instruments; Commission Agency (excluding auction), lease of self owned houses. (the above business scope does not include items restricted or prohibited by national laws and regulations, except those involving the implementation of special access management measures as required by the state, and those involving licenses can only carry out business activities with relevant licenses).
Hangzhou Kobelco Construction Machinery Co., Ltd
Hangzhou Kobelco Construction Machinery Co., Ltd. was established in December2003 and is located at No. 1, No. 22 street, Hangzhou Economic Development Zone. It is a full-time company invested 100% by Kobelco Construction Machinery Co., Ltd.
Business scope: production, processing and sales: excavators (engineering hydraulic excavators, agricultural hydraulic excavators) and their spare parts; Development and Design: new mechanical equipment for highway and port, hydraulic excavator, engineering mechanical equipment, agricultural mechanical equipment (agricultural hydraulic excavator); To engage in the import, export and wholesale business of the above products and related commodities; Provide after-sales services for the above-mentioned products (except for those involving the implementation of Special Administrative Measures for access as stipulated by the state. For projects subject to approval according to law, business activities can be carried out only with the approval of relevant departments).
At present, the whole machine products are mainly oriented to China's domestic market; At the same time, it makes full use of the convenient transportation advantages of the coastal areas, actively carries out export business, and the whole machine is exported to Myanmar, Thailand, Indonesia, the Philippines and other countries in Southeast Asia and South America; At the same time, the structural parts required for the production of excavators are provided to overseas Kobelco workshops in Japan, India, Thailand, North America and European customers. Hangzhou Kobelco, as the global production base of Kobelco Construction Machinery Co., Ltd., is an important part of the global production system of Kobelco Construction Machinery Co., Ltd..
