Kobelco, crawler crane, China--Kobelco to manufacture crawler cranes in China

Kobelco is to manufacture crawler cranes in China, focusing on its 250-tonners, in a joint venture with longterm partner Sichuan Chengdu Chenggong Construction Machinery (CG). Kobelco recently announced another new crane plant in India, its first outside Japan.

The joint venture, Chengdu Kobelco Cranes Co., Ltd., will make and sell crawler cranes. ¥2bn ($23m) is set for investment in the new plant, with production due to start in August 2012. By 2015, Kobelco aims to produce up to 80 crawler cranes a year to meet approximately 7% of China’s demand.

Crawler crane production in China will enable Kobelco to strengthen its involvement in the world’s largest market for this variety of construction machinery. The Chinese market is comprised of 700 units of the world’s total demand of 2,500 crawler cranes. The Chinese market is currently enjoying an increase in demand for crawler cranes, following the temporary drop in the world market since the financial crisis in 2008; sharply rising infrastructure investments is helping to support the market. Demand is expected to continue to expand in the long-term as development of the western region is underway, particularly in the plant location of Sichuan Province. Kobelco is targeting its 250t class crawler cranes for this market.

The plant in China will be Kobelco’s second overseas manufacturing location after India; the new plant will be the first facility of a Japanese manufacturer in China to make crawler cranes. The deal is part of a move by parent Kobe Steel to develop hydraulic excavator and crawler cranes production in China and India, with the intention of supplying machines for use in construction, civil engineering and new energy investments. Kobelco enjoys a 50% share of the Japanese crawler market, with an estimated world market share of 17%.

A Kobelco spokesman said that CG and Kobelco have been partnered for a number of years, so there is an intrinsic understanding of the manufacturing methods required. To make a full-scale entry in China, where Chinese construction equipment makers are on the rise, Kobelco came to the conclusion that teaming up with CG was essential to keep investment costs down and to enter the market quickly.

The new plant will be located in the Chengdu economic and technological zone in Chengdu, Sichuan Province, adjacent to the plant CG plans to move to in 2011. Kobelco Construction Machinery’s joint venture, Chengdu Kobelco Construction Machinery Co., Ltd (CKCM), is also located next door. This ensures distribution and information can be shared through the group, a move Kobelco hope will improve the efficiency of group management.

The Kobe Steel Group’s crane business began in 1953, since then, production has been centered in Japan, although the group’s Indian plant is tasked with helping Kobelco to quickly grow in the global market in an attempt to overcome foreign exchange risks and tariff barriers.

Source: Cranestoday Magazine